Canada is preparing to introduce its first federal framework for fiat-backed stablecoins under the 2025 budget, closely mirroring the United States' GENIUS Act passed in July 2025. The Bank of Canada will allocate $10 million over two years, starting in fiscal year 2026-2027, to oversee implementation, with annual costs of about $5 million recovered from issuers regulated under the Retail Payment Activities Act.
Stablecoin issuers must maintain full reserves, establish clear redemption policies, and implement robust risk management systems, including safeguards for personal and financial data. This initiative aims to strengthen trust in digital payment systems and modernize transactions for Canada's 41.7 million residents, making them faster, cheaper, and more secure.
Coinbase Canada CEO Lucas Matheson endorsed the proposal, telling CBC it could "change how Canadians interact with money and the internet forever." The global stablecoin market, valued at $309.1 billion, is projected to reach $2 trillion by 2028, with institutional adoption accelerating among firms like Western Union, SWIFT, MoneyGram, and Zelle.
In a related move, Western Union plans to launch the US Dollar Payment Token (USDPT) on the Solana blockchain in the first half of 2026, leveraging its speed and low costs for remittances. This development follows Canada's decision to shelve its central bank digital currency (CBDC) in September 2024 due to a lack of compelling need.
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