The Canadian government has planted a flag committing to legislation that would regulate stablecoins backed by its dollar, following in the recent footsteps of its American neighbors, which passed a new law to govern stablecoin issuers there over the summer.
With the release of Budget 2025 on Tuesday, the government said it is focused on setting clear standards for 1-1 reserves and will put the administration of the effort in the hands of the Bank of Canada.
Following the new US law known as the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS) Act, the Canadian development was met with praise from crypto advocates there.
The Canadian Web3 Council said it is “encouraged by the government’s commitment to enable innovators to issue stablecoins, which will promote competition in Canada’s payments market and reduce transaction costs for consumers and businesses.”
The budget indicated that the government will have to make changes to the Retail Payment Activities Act. It also called for “national safeguards” to ensure the safety of the Canadian financial system.
“Canada has fallen behind the global standard for this innovative technology and this is an excellent step forward [Minister of National Revenue] François-Philippe Champagne and [Prime Minister] Mark Carney to increase innovation in the financial sector,” said Didier Lavallée, CEO of Tetra Digital Group, which bills itself as Canada’s first fully regulated digital asset depository and financial services provider. He added that the approach “sends a strong signal that stablecoins should be regulated as payment instruments and not as securities.”
With the commitment made, attention will shift to how it is put into place.
“It’s great to see real progress,” said Eric Richmond, general counsel for Shakepay, in a post on the social network LinkedIn. “Now the focus turns to implementation: ensuring the framework remains open, proportionate and accessible so fintechs can help build the next generation of trusted payment rails for Canadians.”
Read more: Tetra Digital raises $10 million to create a regulated Canadian dollar stablecoin
