Canada moves forward with budget that introduces new stablecoin policy
Canada has taken a significant step toward shaping its digital asset landscape after the government secured a narrow parliamentary approval for its latest budget. Among the many financial measures included in the document is a new policy framework that sets the rules for stablecoin issuance across the country. The approval represents an early victory for Prime Minister Mark Carney as he works to establish stronger oversight of the growing digital currency sector.
The budget outlines plans for the Bank of Canada to supervise and register companies that wish to issue stablecoins. Much like the recent approach taken in the United States, the Canadian rules would require issuers to maintain full reserves that match the value of their stablecoins on a one to one basis. These reserves must consist of the reference currency or other assets considered highly liquid and secure. The policy also requires that customers be able to redeem their stablecoins immediately and that issuers meet strict standards related to risk management, cybersecurity, operational transparency and procedures in case of failure.
One notable aspect of the Canadian approach is the restriction placed on non bank issuers. Under the proposed rules they would not be permitted to offer any form of interest or yield to customers who hold their stablecoins. This limitation has already sparked discussion within the industry as it could affect how competitive Canadian stablecoins become when compared to global alternatives.
Prime Minister Carney drew attention over the weekend when he appeared at the Canadian Football League championship game alongside Lucas Matheson, the CEO of Coinbase Canada. Although the appearance signaled growing engagement between government and industry leaders, Matheson later shared that the new policy still needs refinement. He described the framework as a step in the right direction but urged lawmakers to introduce a temporary pathway that would allow stablecoins backed by the Canadian dollar to enter the market sooner. He also argued that issuers should have the ability to provide yield on deposits, a feature he believes would strengthen Canada’s position in the global market.
Matheson emphasized that these adjustments could help reinforce the international relevance of the Canadian dollar at a time when digital currencies backed by the United States dollar continue to dominate worldwide. Several regions, including parts of Asia and the European Union, are also exploring ways to raise the visibility of their local currencies through regulated digital tokens.
As Canada moves forward, the stablecoin policy is expected to play a key role in shaping the future of digital finance within the country. The coming months will determine whether lawmakers introduce further changes or stand firm on the framework outlined in the budget.
