Canada to Introduce Stablecoin Regulations in 2025 Federal Budget

Canada is preparing to introduce new legislation regulating fiat-backed stablecoins, marking a major step toward modernizing the country’s financial and digital payment systems. The move, unveiled in the federal budget for 2025, follows the United States’ passage of the GENIUS Act in July.

Under the proposed framework, stablecoin issuers will be required to maintain adequate reserves, establish clear redemption policies, and implement strict risk management and data protection measures. The initiative aims to ensure that stablecoins operate safely and transparently within the country’s financial ecosystem.

The Bank of Canada will play a key role in the rollout, with $10 million allocated over two years beginning in the 2026–2027 fiscal year. Afterward, the central bank expects annual operating costs of around $5 million, with regulated issuers covering it under the Retail Payment Activities Act.

Though the government did not specify when the legislation will be formally introduced, it described the move as part of a wider effort to modernize Canada’s payment systems, making transactions faster, cheaper, and more secure for the nation’s 41.7 million residents.

Institutional Adoption Signals Growing Confidence

Coinbase Canada CEO Lucas Matheson praised the plan, calling it a transformative moment that will change how the citizens interact with money and the internet forever.

Globally, the stablecoin market has surged to over $309 billion, and the U.S. Treasury projects it could further exceed $2 trillion by 2028. Institutions are increasingly embracing the technology, with financial giants such as Western Union, SWIFT, MoneyGram, and Zelle either integrating or exploring stablecoin payment systems.

In Canada, homegrown fintech companies are already positioning themselves for growth. Tetra Digital, a Toronto-based payments platform, recently secured $10 million in funding to develop a digital version of the Canadian dollar. The investment, backed by Shopify, Wealthsimple, and the National Bank of Canada, reflects strong confidence in the country’s emerging digital finance sector.

Canada’s Shift Away from a CBDC

The move toward stablecoin regulation comes after the Bank of Canada decided in September 2024 to pause plans for a CBDC. Governor Tiff Macklem stated that there was “no compelling case” for a government-issued digital currency at this time.

Instead, Canada appears to be embracing private-sector innovation under tighter oversight — signaling a new era for digital payments built on stability, trust, and innovation.