Canada plans stablecoin rules aligned with the federal budget. Bloomberg reported that officials met regulators and industry for weeks. An update could arrive on Nov. 4 with the budget.
Officials want stablecoin regulation that fits payments oversight. They discuss custody, audits, disclosures, and redemption terms. The aim is clear expectations for issuers and users.
Canada lacks one law for stablecoins today. Regulators said some tokens may be securities or derivatives under current rules. The federal budget offers a way to outline Canada stablecoin rules without a new act.
Bank of Canada pushes stablecoin regulation
The Bank of Canada urges clear stablecoin regulation to modernize payments. It warns that fragmented policy slows adoption and raises risks. It calls for defined duties across agencies.
Ron Morrow summarized the stance.
“Governments are moving to regulate stablecoins and other cryptocurrencies so consumers can reap their benefits and be protected from credit and liquidity risks,”
said Ron Morrow. The quote highlights consumer protection and liquidity focus.
Therefore, the central bank frames stablecoin rules as a payments issue. It stresses full backing, timely redemption, and transparency. It wants consistent supervision across the system.
GENIUS Act offers a working template
The United States passed the GENIUS Act in June. It created a framework for fully collateralized, dollar-backed stablecoins. It requires AML safeguards and regular audits.
The GENIUS Act begins in January 2027. Firms have time to align reserves and attestations. Regulators can publish implementing guidance before that date.
Canadian officials watch this closely. Canada stablecoin rules can mirror core pillars without copying text. Full backing, audit cadence, and clear oversight remain central. Cross-border alignment reduces friction for issuers and users.
Canadian market snapshot: USDC, QCAD, USDt
The Canadian-dollar stablecoin market is still small. QCAD, from Toronto-based Stablecorp, is backed 1:1 by the Canadian dollar. It shows a CAD option exists, but scale is limited.
Meanwhile, USDC remains available in Canada. However, exchanges ended support for Tether’s USDt in 2023. That change pushed activity toward other issuers and rails.
Related activity continues around custody and compliance. Coverage has noted Coinbase investments in a Canadian stablecoin issuer. These steps build local capacity that stablecoin regulation can formalize.
What the federal budget may say on stablecoin rules
The federal budget could assign day-to-day stablecoin regulation. Payments supervisors may oversee reserves and redemption. Securities tests could apply when tokens resemble funds.
Disclosures and audits will likely sit at the center. Regular reports on backing and liquidity would be required. Timelines for redemption and stress procedures could be specified.
Coordination also matters. Payments, securities, and AML teams need shared data. A single contact point would reduce gaps. The budget note can set direction before detailed rules arrive.
Implementation signals for Canada stablecoin rules
Watch the Nov. 4 budget language for scope and timing. It may set milestones ahead of formal regulations. It could reference sandbox paths for issuers under supervision.
Finally, officials may address cross-border circulation. USDC usage in Canada will shape compliance flows. QCAD will test domestic issuance under Canada stablecoin rules.