Canada is set to introduce a comprehensive regulatory framework for stablecoins, with the proposal likely included in the federal budget scheduled for November 4, 2025. The move aims to clarify the classification of stablecoins and prevent capital outflows to U.S. dollar-backed tokens, addressing concerns over financial stability and competitiveness.
Officials from the Department of Finance and other agencies have held meetings with regulators and industry firms in recent weeks to develop the framework. Experts warn that the lack of clarity could reduce demand for Canadian bonds, push up interest rates, and limit the Bank of Canada's control over the money supply.
Globally, stablecoin adoption is accelerating, with Europe implementing the MiCA regulation, Japan and Hong Kong advancing their policies, and the U.S. recognizing stablecoins as payment instruments under the GENIUS Act passed in July. The stablecoin market has surpassed $300 billion and is projected by Standard Chartered to reach $1 trillion in the coming years.
Industry leaders, including John Ruffolo, founder of Maverix Private Equity, emphasize that Canada risks losing crypto investment to the U.S. without prompt action. Carolyn Wilkins, former deputy governor of the Bank of Canada, stressed the need for rules that foster trust and stability to maintain competitiveness in the digital asset landscape.
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