Catenaa, Saturday, November 01, 2025- Canada is advancing a regulatory framework for stablecoins, with officials aiming to include it in the federal budget to be presented on November 4, Bloomberg reported.
The effort follows growing global attention on fiat-pegged cryptocurrencies, including regulatory initiatives in the US, Japan, Hong Kong, and Europe.
Intensive discussions between the Department of Finance and industry stakeholders have focused on defining stablecoins’ classification, whether as securities or derivatives, and on preventing capital flight to US dollar-backed tokens. Analysts warned that unclear rules could drive Canadian investment south, raise borrowing costs, and weaken the Bank of Canada’s monetary control.
Globally, stablecoins are approaching $300 billion in circulation, primarily dominated by US dollar–pegged tokens from Tether and Circle. Canada’s push mirrors recent US legislation under the GENIUS Act, though American lawmakers continue to debate the adequacy of the framework. European MiCA regulations are already in place, while Asian nations accelerate policy development.
Officials said clarity on classification, issuance, and compliance is critical to fostering domestic demand and maintaining Canada’s competitiveness in digital finance. Industry experts anticipate the stablecoin market will expand further in coming years, with estimates suggesting up to $1 trillion could shift from emerging market bank deposits into US stablecoins by 2028.
The Canadian government’s framework could set new precedents for regulatory treatment, providing legal certainty for issuers and financial institutions, while ensuring investor protections in a rapidly growing sector.
