The Canadian government has planted a self-made flag in legislation to regulate its dollar-backed StableCoins, following in the recent footsteps of its US neighbors who passed a new law to govern stablecoin issuers there over the summer.
Including Release of Budget 2025 On Tuesday, the government said it is committed to setting clear standards for 1-1 reserves, and will put oversight of the effort in the hands of the Bank of Canada. “This legislation will require issuers to maintain and manage adequate asset reserves, establish redemption policies, implement risk management policies, and protect the sensitive and personal information of Canadians,” according to the budget document that appeared this week.
Following on the heels of New law in the US Known as the National Innovation Guide and Establishment for the US StableCoins Act (Genius) Act, Canada’s development has been greeted with praise from crypto advocates there.
The Canadian Web3 Council said “the government’s commitment to enable innovators to issue StableCoins has encouraged competition in Canada’s payments market and reduced transaction costs for consumers and businesses.”
The budget indicates that the government needs to make amendments to the Payment Activities Act. It also called for “national security measures” that ensure the safety of Canada’s financial system.
“Canada has fallen behind this global standard for this innovative technology and this is a great step forward by (Minister of National Revenue) François-Philippe Champagne and (Prime Minister) Mark Carney to increase the innovation of the financial sector,” said Didier Lavallée, the CEO of Tetra Digital Group, which Bills itself as the First Fully Regulated Digital Asset Custodian and Financial Services Provider. He added that the approach “sends a strong signal that stablecoins need to be regulated as payment instruments and not as securities.”
With the promise, the focus shifts to how it is put into place.
“It’s great to see real progress,” said Eric Richmond, general counsel of ShakePay, in a Post on the Social Media Site LinkedIn. “Now the focus turns to implementation: Make sure 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 $10m to create a regulated Canadian dollar stableCoin
