Canada Follows U.S. in Regulating Stablecoins in Budget

**Canada to Establish New Stablecoin Laws, Mirroring the U.S. GENIUS Act**

Stablecoins are gaining worldwide attention for their ease of use in payment transactions. In response, Canada is on track to introduce new regulations for stablecoins, aligning its approach with recent legislative developments in the United States.

—

### Canada Moves Forward with Stablecoin Regulations

As disclosed in the Canadian government’s 2025 budget released on Tuesday, November 4, 2025, stablecoin issuers will soon need to meet specific criteria under proposed federal legislation. These requirements include holding sufficient reserves and establishing clear redemption policies. Additionally, issuers must implement robust risk management frameworks designed to protect personal and financial data.

Starting in the 2026-2027 fiscal year, the Bank of Canada will allocate $10 million over two years to oversee a smooth regulatory rollout. Following this initial phase, stablecoin issuers are expected to cover an estimated $5 million annually in regulatory costs. These rules will come under the ambit of the Retail Payment Activities Act.

The government’s primary goal is to deliver faster, cheaper, and safer digital transactions to benefit Canada’s 41.7 million residents. This effort also forms part of a broader initiative to modernize the country’s entire payment system.

—

### No Central Bank Digital Currency for Now

Currently, Canada does not have a Central Bank Digital Currency (CBDC). The country canceled its digital loonie project in September 2024, with Bank of Canada Governor Tiff Macklem stating, “No strong case yet.” Since then, Canada has shifted focus from developing a digital currency toward modernizing its domestic payment infrastructure.

—

### Canada’s Stance Amid Market Movements

In an unexpected move, the National Bank of Canada adopted a bearish stance towards Bitcoin. The bank filed documents with the U.S. Securities and Exchange Commission (SEC) to exercise a put option on its BlackRock iShares Bitcoin Trust ETF holdings, valued at more than $1.3 million.

Despite this cautious approach towards cryptocurrencies, Canada is eager not to lag behind in regulatory frameworks and global competition. The move to establish clear stablecoin laws follows the United States’ passage of the GENIUS Act in July 2025, signaling a growing emphasis on regulating digital assets.

—

### Stablecoin Market Expansion

The introduction of regulatory frameworks in both the U.S. and Canadian markets comes amid rapid expansion in the stablecoin sector. Currently, the stablecoin market sits at approximately $309.1 billion. The U.S. Treasury estimated in April 2025 that this figure could surge to $2 trillion by 2028.

Stablecoins have already become dominant in several markets. For example, in Latin America, Tether (USDT) and USDC stablecoins hold a leading position. In Argentina, stablecoins make up 72% of all cryptocurrency purchases in 2024, far surpassing Bitcoin, which accounts for only 8%.

—

### Innovation in Stablecoin Payments

Partnerships are accelerating the adoption of stablecoin payments worldwide. Recently, DeCard partnered with Polygon Labs to enable stablecoin payments across over 150 million merchants globally. This platform allows users to convert popular cryptocurrencies like USDT and USDC into traditional fiat currencies, which can be spent anywhere cards are accepted.

In Canada, payment platforms such as Tetra Digital are emerging as key players in the stablecoin space. Tetra Digital has raised $10 million to create a digital version of the Canadian dollar, backed by investments from major firms including Shopify, Wealthsimple, and the National Bank of Canada.

—

Canada’s regulatory efforts and market innovations indicate a significant step toward integrating stablecoins into mainstream finance, ensuring secure and efficient digital payment options for Canadians.
https://bitcoinethereumnews.com/tech/canada-follows-u-s-in-regulating-stablecoins-in-budget/