Canada Speeds Up Stablecoin Regulations to Mitigate U.S. Financial Impact

Canada is moving quickly to establish regulations for stablecoins, with Finance Minister François-Philippe Champagne expected to introduce these policies in the federal budget on November 4, as reported by

. This initiative is designed to stop capital from flowing into U.S.-issued stablecoins, which currently lead the global market and threaten Canada’s financial independence, according to .

The urgency is driven by the rapid expansion of stablecoins—digital assets tied to traditional currencies—especially those pegged to the U.S. dollar. With daily transaction volumes hitting $2.7 billion and yearly totals nearing $1 trillion, specialists caution that unchecked use of foreign stablecoins could undermine Canada’s monetary authority and increase reliance on U.S. debt, as highlighted by

. John Ruffolo, vice chair at the Council of Canadian Innovators, points out that more Canadians may use U.S. stablecoins for international transfers, which would benefit American financial entities and send sensitive financial data abroad.

The United States has already taken the lead with the GENIUS Act, passed in June 2025, requiring stablecoins to be fully backed by U.S. Treasuries and to comply with anti-money laundering (AML) regulations. This law has fueled global interest in dollar-pegged stablecoins, now valued at over $300 billion. Canadian regulators and the central bank have called for similar transparency, with Ron Morrow, executive director of payments at the Bank of Canada, emphasizing that stablecoins should be “as secure and reliable as your bank account balance.”

The new Canadian rules are anticipated to clarify how stablecoins are classified, set out consumer protections, and define reserve requirements, ending years of legal uncertainty. At present, stablecoins are generally treated as securities or derivatives, but industry leaders believe they should be recognized as payment tools to encourage innovation and maintain stability. The Bank of Canada has also stressed the importance of a coordinated national approach to avoid liquidity problems and broader financial risks.

The implications are significant. Mirza Shaheryar Baig, a currency strategist at Desjardins, observes that more than 99% of stablecoin value is linked to the U.S. dollar. Since the GENIUS Act mandates full backing by U.S. Treasuries, international use of these stablecoins increases demand for American debt, which could push up Canadian interest rates and weaken the effectiveness of Canada’s monetary policy. The Bank of Canada has cautioned that without prompt action, the country could lag behind the U.S. and Europe in digital payment innovation.

Canadian stablecoin projects like QCAD and CADC have faced challenges due to unclear regulations. Nonetheless, Tetra Trust, a regulated custodian supported by National Bank and Shopify, is preparing to introduce a CAD-pegged stablecoin in 2026. The upcoming federal budget is expected to offer the regulatory certainty needed to boost adoption and keep pace with international standards.

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