Canada Plots Stablecoins Regulations Ahead of Budget Update

The Canadian government is moving quickly to set a clearer regulatory framework for stablecoins. The government aims to include the new rules in its federal budget scheduled for November 4. 

This move is an important step to make the rules clearer for digital currencies in the country. This comes as other regions around the world compete to regulate crypto.

Canada Set to Build a Clear Path for Stablecoins

According to Bloomberg, Canadian officials at the Department of Finance and other government agencies have been holding many meetings with industry leaders. These talks with regulators have been happening over the past few weeks.

These meetings have mainly focused on deciding what kind of financial rules stablecoins should follow, such as whether they are securities or derivatives. Officials have also tried to prevent money from going into U.S. dollar-backed tokens.

The issue has long created uncertainty for market participants. In Canada, stablecoins have often been treated as financial instruments without clear rules. This has left both issuers and investors in an uncertain situation. The upcoming proposal seeks to resolve this challenge once and for all.

Industry Leaders Push for Regulatory Clarity

This move to clarify regulations comes after leaders in Canada’s technology and financial sectors have repeatedly asked for clear rules. John Ruffolo, co-chair of the Council of Canadian Innovators, recently warned that delays in regulating stablecoins could harm the country’s financial stability. 

He noted that the lack of domestic alternatives may drive Canadian capital to the U.S.-issued stablecoins. 

This could potentially increase borrowing costs and weaken the Bank of Canada’s control over monetary supply. These concerns have made the government act more quickly. Officials want to support innovation while keeping the economy stable.

Global Stablecoin Market Grows as Countries Race to Set Rules

Canada’s move comes at a time when other major economies are also advancing stablecoin legislation. 

In July, the U.S. government signed the GENIUS Act, which classified compliant stablecoins as payment instruments into law. However, the framework has drawn criticism. Senator Elizabeth Warren recently described it as too lenient, and Federal Reserve officials pointed out regulatory gaps. 

Europe also introduced the Markets in Crypto-Assets Regulation (MiCA), which sets clear rules for stablecoin providers. Across Asia, jurisdictions such as Japan and Hong Kong are also developing their own policy structures to attract responsible crypto innovation. 

The rush to create a clear regulatory system for stablecoin comes as the market is growing fast. The global stablecoin market has now reached nearly $300 billion in total supply. The most popular are U.S. dollar-backed tokens, such as Tether and Circle’s USDC.

Analysts think this number will grow a lot in the next few years. Standard Chartered analysts recently predicted that up to $1 trillion could move from emerging market bank deposits into stablecoins by 2028. This shows that stablecoins are playing a growing role in cross-border finance.