Canada has announced its intention to create a comprehensive regulatory framework for fiat-backed stablecoins, as outlined in its 2025 federal budget.
This move follows in the footsteps of the United States, which last year passed its own landmark stablecoin legislation, the GENIUS Act.
The proposed legislation will require stablecoin issuers to maintain adequate reserves, establish clear redemption policies, and implement robust risk management frameworks.
These frameworks will include specific measures to protect users' personal and financial data.
To support the new regulatory system, $10 million will be allocated to the Bank of Canada over two years, with ongoing costs offset by fees from stablecoin issuers regulated under the Retail Payment Activities Act.