Federal plan aims to protect consumers and streamline crypto payments with strict stablecoin oversight
A new era for digital currency regulation is on the horizon as the federal government commits to introducing new legislation.
According to CBC News, the proposed laws will require stablecoin issuers to maintain robust asset reserves and meet national security standards. These measures aim to protect consumers and ensure the stability of digital payments.
Stablecoins, digital assets pegged to real-world currencies or commodities, have been touted as a way to make payments faster, cheaper, and more accessible.
However, concerns about risk management and the lack of a regulatory framework have prompted calls from financial leaders for decisive action.
The 2025 federal budget responds to these concerns by outlining plans for a legislative framework that will set clear rules for reserve management, information privacy, and national security for stablecoin issuers, as reported by BNN Bloomberg.
The move follows the United States’ introduction of the GENIUS Act, which opened the door for major American companies to issue US dollar-backed stablecoins.
Canadian stakeholders have warned that without similar regulation, Canada risks losing capital and innovation to US markets, as more businesses seek the efficiency of crypto-based money transfers.
As part of the government’s payments modernization plan, the forthcoming legislation will also amend the Retail Payment Activities Act to regulate electronic payment service providers using cash-backed stablecoins.
According to CBC News, the Bank of Canada will receive $10m over two years to administer the new framework, with ongoing costs to be covered by regulated stablecoin issuers.
Industry leaders have welcomed the announcement.
Lucas Matheson, CEO of Coinbase Canada, said the move “signals that Canada is ready to lead on digital innovation,” and predicted it will “change how Canadians interact with money and the internet forever.”
Kareem Sadek of KPMG Canada noted that clear legislation will help move stablecoins beyond fragmented regulations, fostering innovation in the sector.
Montreal-based fintech Shakepay called the budget “a big step forward,” emphasizing that it sets the stage for Canadian dollar-backed stablecoins to be recognized as payments, not investments.
While the budget highlights the benefits of stablecoins, including their potential to improve prosperity and good governance, it also acknowledges ongoing concerns about security infrastructure and the need for safeguards against illegal financial transactions.
Details on the specific “national security safeguards” and the timeline for the legislation remain forthcoming, as reported by CBC News.
The government’s approach signals a significant shift in the regulatory landscape for digital assets, with implications for institutional investors, pension funds, and benefits administrators seeking secure, efficient payment solutions in an evolving financial ecosystem.
