🇨🇦 Canada Approves New Stablecoin Framework in Landmark Federal Budget

Prime Minister Mark Carney’s government greenlights a regulatory regime putting the Bank of Canada in charge of stablecoin oversight — aligning the country with the U.S. while protecting the Canadian dollar’s dominance.

Canada has passed a federal budget containing its first comprehensive stablecoin regulatory framework, marking a major step toward modernizing its digital finance landscape. Prime Minister Mark Carney’s government narrowly secured parliamentary approval, setting the stage for formal oversight of stablecoin issuers under the supervision of the Bank of Canada.

The move mirrors the U.S. approach but adapts it to Canadian priorities: currency sovereignty, financial stability, and controlled innovation.

🔎 Quick Facts

• 🏛️ Canada passes new federal budget with stablecoin rules
• 🏦 Oversight transferred to the Bank of Canada
• 💵 1:1 reserves in CAD or high-quality liquid assets required
• ⚡ Mandatory instant redemption at face value
• 🚫 Non-bank issuers forbidden from offering yield
• 🌐 Aligns Canada with U.S. and EU stablecoin policies

💰 The Core of Canada’s Stablecoin Rules

1. 🧩 One-to-One Reserve Requirement

Stablecoins must be fully backed by:

• Canadian dollars, or
• high-quality liquid assets (HQLA)

No fractional reserves allowed — a direct safeguard against systemic risks.

2. ⚡ Instant Redemption

Users must be able to convert stablecoins to CAD at face value, instantly and without restrictions.

3. 🔐 Operational Risk & Cybersecurity Standards

Issuers must implement:

• robust risk management systems,
• cybersecurity protocols,
• transparency and reporting requirements,
• contingency planning for failures.

4. 🚫 No Yield for Non-Bank Issuers

Stablecoin issuers outside the banking sector are banned from offering:

• yield,
• interest,
• any financial incentives tied to deposits.

This prevents shadow-banking behavior.

5. 🏦 Full Oversight by the Bank of Canada

The central bank will:

• supervise stablecoin issuers,
• maintain a public registry,
• enforce compliance and reserve audits.

🗣️ Industry Response: Coinbase Wants Adjustments

Lucas Matheson, CEO of Coinbase Canada, called the policy “a step in the right direction” but urged refinements to keep Canada competitive:

• ⚡ Faster interim path for CAD-stablecoins to reach the market
• 💸 Permission for issuers to share yield to attract liquidity

Matheson argues these changes would help Canada strengthen the global presence of the Canadian dollar while fostering innovation.

🌍 Canada’s Play in the Global Stablecoin Race

The worldwide stablecoin market is dominated by USD-pegged tokens, but major regions — including the EU — are building frameworks for local currency alternatives.

Canada is now joining that effort, using regulation as a lever to:

• ensure financial stability,
• protect the CAD’s international relevance,
• bring institutional clarity to digital finance.

💡 Why It Matters

For Consumers

Stronger guarantees, safer stablecoins, transparent protection.

For Institutions

Clear rules unlock investment and innovation pathways.

For Global Markets

Canada positions itself alongside the U.S. and EU in shaping next-generation digital currency standards.

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