The Canadian federal government is reportedly working on new regulations for stablecoins, with an announcement likely in next week’s federal budget. This initiative follows the United States’ GENIUS Act, which established a regulatory framework for stablecoins.

Citing sources familiar with the matter, Bloomberg stated that discussions have been ongoing between government officials, regulators, and industry stakeholders for several weeks. We could see an official update on stablecoin regulations on November 4, when Finance Minister François-Philippe Champagne presents the budget.

Currently, Canada lacks a comprehensive legal structure for stablecoins, although regulators have indicated that some tokens might be classified as securities or derivatives under existing regulations.

The local market for Canadian-dollar-pegged stablecoins is still developing, with QCAD from Toronto’s Stablecorp being a notable example, fully backed by the Canadian dollar.

In contrast, US dollar–pegged stablecoins are available in Canada, particularly USDC, following the end of support for Tether’s USDt in 2023.

“Governments are moving to regulate stablecoins and other cryptocurrencies so consumers can experience their benefits while being shielded from credit and liquidity risks,” said Ron Morrow, who oversees payments at the Bank of Canada.
“Les gouvernements s’efforcent de réglementer les stablecoins et d’autres cryptomonnaies pour que les consommateurs puissent en retirer les avantages tout en étant protégés contre les risques de crédit et de liquidité.”

The Bank of Canada has been advocating for clearer guidelines on stablecoins to modernize payment systems and avoid lagging behind other countries.

Since the U.S. enacted its GENIUS Act in June, many companies have expressed interest in the expanding stablecoin market, which now boasts over $300 billion in US dollar-pegged stablecoins.