Canada is preparing to introduce its first national framework to regulate fiat-backed stablecoins, marking a major step toward formal oversight of digital payment assets. The initiative, outlined in the federal Budget 2025, aims to ensure consumer protection, financial stability, and trust in emerging forms of digital money.
According to the budget document released Tuesday, the forthcoming legislation will require stablecoin issuers to maintain sufficient asset reserves, implement clear redemption policies, and adopt robust risk-management frameworks.
These will include measures for protecting personal and financial data, along with national security safeguards designed to preserve the integrity of the financial system.
To administer the new regime, the Bank of Canada will receive $10 million over two years, beginning in the 2026-27 fiscal year, to develop oversight and enforcement capacity.
Thereafter, the central bank expects to incur $5 million annually in administrative costs, which will be recovered from regulated stablecoin issuers under the Retail Payment Activities Act.
The move follows the United States’ passage of the GENIUS Act in July 2025, the first comprehensive federal law governing stablecoins. Policymakers in Ottawa had faced growing pressure to establish parallel rules to ensure interoperability and regulatory alignment between the two North American markets.
While the budget does not specify when the legislation will be tabled, officials described it as part of a broader payments modernization strategy intended to make digital transactions faster, cheaper, and more secure for Canada’s 41.7 million citizens.
In addition, the government plans to amend the Retail Payment Activities Act to extend oversight to payment service providers using stablecoins and to explore ways to integrate artificial intelligence safely into the financial sector.
Once enacted, Canada’s framework would position the country among a growing list of advanced economies seeking to regulate stablecoins as part of their evolving digital finance ecosystems.