Budget 2025 which was recently passed in the Canadian House of Commons, announced the government’s intention to introduce legislation to regulate the issuance of fiat-backed stablecoins in Canada.
This legislation will require issuers to maintain and manage adequate asset reserves, establish redemption policies, implement risk management frameworks, and protect the sensitive and personal information of Canadians. The legislation will also include national security safeguards to support the integrity of the framework so that fiat-backed stablecoins are safe and secure for consumers and businesses to use.
To administer the relevant legislation, the Bank of Canada will retain $10 million over two years, starting in 2026-27, from its remittances to the Consolidated Revenue Fund. Administrative costs in subsequent years are projected to be $5 million per year and will be offset from stablecoin issuers regulated under the Retail Payments Activities Act (the RPAA).
Related amendments to the RPAA will also be made to enable the regulation of payment service providers that carry out payment functions using prescribed stablecoins.
Budget 2025 is available for download from the website of the Government of Canada.
For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606.
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