Canada Budget Promises to Stablecoin Regulation Next Year

Canada is set to introduce legislation regulating fiat-backed stablecoins under its federal budget for 2025, following the footsteps of the US, which passed landmark stablecoin laws in July.

Stablecoin issuers will be required to hold sufficient reserves, establish redemption policies and implement various risk management frameworks, including measures to protect personal and financial data, according to the government’s 2025 budget released on Tuesday.

The Bank of Canada would allocate $10 million over two years, starting in the 2026-2027 fiscal year, to ensure everything runs smoothly, followed by an estimated $5 million in annual costs that will be offset from stablecoin issuers regulated under the Retail Payment Activities Act.

It comes nearly four months after the US passed the stablecoin-regulating GENIUS Act, which put pressure on Canada to pass its own rules for the tokens.

While the document didn’t specify when the legislation will be tabled, it is part of a broader plan to modernize payments and make digital transactions faster, cheaper, and more secure for the country’s 41.7 million people.

Coinbase Canada CEO Lucas Matheson is bullish on the proposal, and told CBC on Monday that it would “change how Canadians interact with money and the internet forever,”.

Institutional stablecoin adoption grows

The stablecoin market currently sits at $309.1 billion, with the US Treasury estimating in April that it would climb to $2 trillion by 2028.