The Bank of Canada has announced a pivotal regulatory shift, declaring that starting in 2026, it will only approve high-quality fiat-pegged stablecoins for use within the country. Governor Tiff Macklem outlined the criteria at the Montreal Chamber of Commerce, stating the goal is for stablecoins to serve as "good money," akin to bank notes or deposits.
The new rules mandate that approved stablecoins must be pegged at a strict 1:1 ratio to a central bank currency, such as the Canadian dollar, and be backed by "high-quality liquid assets" like Treasury bills and government bonds. This framework, detailed in Canada's 2025 budget report, will also require issuers to hold sufficient reserves, establish clear redemption policies, and implement robust risk management and data protection measures.
This regulatory move aims to address volatility and transparency issues that have plagued some stablecoin projects globally. Macklem emphasized the dual objective of allowing Canadians to leverage stablecoin innovation while ensuring safety and financial system integrity. The policy is seen as a response to global regulatory momentum, following the U.S. GENIUS Act and similar moves in the UK and Hong Kong.
The stablecoin market, currently valued at $313.6 billion and projected by the U.S. Treasury to reach $2 trillion by 2028, will see a significant shift in Canada. While promoting consumer protection and financial stability, the policy may limit innovation by excluding algorithmic or commodity-backed models. Coinbase Canada CEO Lucas Matheson hailed the proposed rules as transformative for how Canadians interact with money.
This decision aligns with Canada's broader financial modernization efforts, including the development of a "Real-Time Rail" payments system and an open banking framework, while the country has simultaneously scrapped plans for a central bank digital currency (CBDC).
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