The days of unregulated digital currencies operating freely in Canada are over. Tiff Macklem, Governor of the Bank of Canada, stood before the Montreal Chamber of Commerce this week with a clear message: only stablecoins with high-quality backing will get approval under the country’s new regulatory framework.
Macklem outlined strict requirements that will govern digital currencies when regulations take effect in 2026. The central bank will only authorize stablecoins backed by fiat currencies from central banks, maintaining a one-to-one peg with traditional money.
“We want stablecoins to be good money, like bank notes or money on deposit at banks,” Macklem said, emphasizing that approved digital currencies must demonstrate the same reliability Canadians expect from conventional financial instruments.
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Cautious Guidelines Take Center Stage
The regulations require stablecoin issuers to back them up with high-quality liquid assets, mainly government bonds and Treasury bills that can be easily converted into cash. This requirement comes from Canada’s 2025 budget report, published in early November, which established guidelines like sufficient reserve holdings, transparent redemption policies, and strong risk management systems.
Stablecoin companies must also put in place solid protections for personal and financial data, addressing growing concerns about digital security in financial services. The central bank designed these safeguards to protect Canada’s 40 million residents while supporting technological innovation in payments.
“The goal is to ensure Canadians can leverage the innovation of stablecoins and do so safely,” Macklem said, framing the regulations as tools to enable rather than block financial technology advancement.
Lucas Matheson, who leads Coinbase Canada, told media recently that these proposed rules would “change how Canadians interact with money and the internet forever,” signaling industry optimism about the regulatory clarity.
Canada joins international efforts toward a stablecoin regime. The U.S. has passed the GENIUS Act, which many say is the most detailed stablecoin framework to date. The U.K. and Hong Kong have also moved forward in similar directions with their regulatory actions.
The timing matters, as the stablecoin market has hit about $314 billion globally. The U.S. Treasury projected in April that this figure could jump to $2 trillion by 2028, highlighting the urgency of establishing clear regulatory boundaries.
Canada’s stablecoin framework fits with its broader modernization efforts, including a real-time rail payments system for instant settlements and an open banking framework allowing easier transitions between financial institutions. The country scrapped plans for a central bank digital currency in September 2024, with Macklem saying there was not enough justification to move forward with that initiative.
