Canada to Introduce Stablecoin Legislation in 2025 Federal Budget

• Canada to regulate fiat-backed stablecoins under new 2025 federal budget framework.
• Bank of Canada to allocate $10M for stablecoin oversight, funded by issuer fees.
• Move aligns with U.S. GENIUS Act and MiCA as global stablecoin regulation expands.

Canada’s federal government has outlined a plan to regulate fiat-backed stablecoins as part of its 2025 national budget, introducing a new framework aimed at ensuring consumer protection and financial stability.

The proposed legislation will require stablecoin issuers to maintain adequate reserves, establish redemption policies, and implement formal risk management systems. The measures will also include data protection standards designed to safeguard the personal information of users transacting with stablecoins.

According to the budget document, the framework will incorporate national security safeguards “to support the integrity of the framework so that fiat-backed stablecoins are safe and secure for consumers and businesses to use.” The new rules mark the government’s first comprehensive attempt to supervise the issuance and circulation of stablecoins in Canada.

Administrative Costs and Implementation

To fund the rollout, the Bank of Canada will retain $10 million from its Consolidated Revenue Fund remittances over two fiscal years beginning in 2026–27. After that period, annual costs, estimated at $5 million, will be covered by fees collected from regulated stablecoin issuers.

In parallel, the federal government plans to amend the Retail Payment Activities Act to extend regulatory coverage to payment service providers that utilize or distribute stablecoins within Canada’s financial ecosystem.

Coordination with Industry and Global Developments

Bloomberg reported that officials from the Department of Finance Canada have been in active discussions with regulators and industry stakeholders regarding the structure of the forthcoming rules. The discussions reportedly centered on classifying stablecoins and preventing capital movement toward U.S. dollar-backed tokens. The budget, however, did not specify the government’s position on those discussions.

The stablecoin program aligns with broader international movements to standardize digital asset regulation. Canada’s proposal follows the GENIUS Stablecoin Act, passed by the United States in July, and mirrors existing frameworks such as Europe’s Markets in Crypto-Assets (MiCA) regulation and similar efforts underway in Japan and South Korea.

Data showed total global stablecoin supply stands at approximately $291 billion, primarily dominated by U.S. dollar-pegged assets. Financial institutions, including Standard Chartered, project that up to $1 trillion could move from emerging market bank deposits into U.S. stablecoins by 2028, underscoring the growing relevance of these digital instruments in global finance.