The Bank of Canada has announced a set of stringent standards for stablecoins as part of its initiative to establish a regulatory framework by 2026. During a speech at the Montreal Chamber of Commerce, Governor Tiff Macklem emphasized the necessity for stablecoins issued within Canada to operate as reliable forms of currency, comparable to traditional banknotes.
Macklem highlighted that these stablecoins must be pegged at a one-to-one ratio with a central bank currency and should be backed exclusively by high-quality liquid assets. This ensures that the tokens can always be converted to cash at par value. He stated, “We want stablecoins to be good money, like bank notes or money on deposit at banks.”
In addition to the backing requirements, issuers will need to maintain full transparency regarding redemption conditions. This includes providing essential information such as timing, applicable fees, and terms of conversion. Furthermore, issuers are expected to demonstrate sufficient operational resilience to guarantee the reliability of their stablecoins. Macklem reiterated, “The goal is to ensure Canadians can leverage the innovation of stablecoins and do so safely.”
In conjunction with these standards, the Bank of Canada plans to collaborate closely with the Department of Finance Canada to finalize regulations next year, aiming to foster confidence among Canadians in using stablecoins.
Stablecoins were prominently included in Canada”s federal budget for 2025, reflecting the government”s commitment to supporting innovation in digital finance. Following the budget, the Bank of Canada is set to allocate ten million dollars over two years starting in 2026 to manage the implementation of this regulatory framework.
As Canada seeks to modernize its financial system, it is looking to keep pace with jurisdictions like the United States, where stablecoin regulations are already being developed. However, Canada aims to achieve this while prioritizing user protection and fostering long-term trust in the system. The forthcoming amendments to the Retail Payment Activities Act will enable oversight of payment service providers engaged in stablecoin transactions.
Legislation will also incorporate national security measures to enhance the integrity of the framework, ensuring that fiat-backed stablecoins remain safe and secure for both consumers and businesses.
