SKN | Canada Pushes Ahead With Stablecoin Policy as Parliament Approves Federal Budget

A Budget Vote That Redefines Canada’s Digital Asset Landscape

Canada is moving closer to establishing a national stablecoin regulatory framework after Prime Minister Mark Carney’s government narrowly won parliamentary approval for its new federal budget. Embedded within hundreds of pages of fiscal and legislative priorities is a landmark effort to define how stablecoins should be issued, backed, and supervised in the country.

The successful budget vote on Monday represents a significant political achievement for Carney, who has positioned digital-asset policy — and stablecoins in particular — as part of Canada’s broader financial modernization agenda. While individual provisions must still clear additional procedural hurdles, the approval signals that Ottawa is prepared to move forward with a structured approach comparable to the recent U.S. stablecoin law.

Bank of Canada Takes the Lead on Issuer Oversight

Under the framework proposed in the budget, the Bank of Canada would serve as the primary regulator and maintain a registry of approved stablecoin issuers. The rules require stablecoins to maintain one-to-one reserves composed of the reference currency or high-quality liquid assets. Issuers must also support instant redemptions and meet standards around risk management, cybersecurity, disclosures, and wind-down planning.

This mirrors several elements of the U.S. GENIUS Act, which similarly mandates high-quality reserves and strict consumer protections for dollar-backed stablecoins.

One notable difference, however, is Canada’s prohibition on paying interest or yield to stablecoin holders — a position that diverges from emerging industry models in the U.S. and Asia. Under the Canadian proposal, non-bank issuers would be barred from offering returns “in cash, digital assets, or other consideration,” a move that may limit consumer adoption but aligns with policymakers’ caution around deposit-like products offered outside the traditional banking system.

Industry Calls for Adjustments to Boost Competitiveness

Lucas Matheson, CEO of Coinbase Canada, said in a Tuesday statement that the federal effort is “a step in the right direction” but argued that key changes are needed if Canada intends to compete in the global stablecoin economy. Matheson publicly called for an interim pathway that would allow CAD-denominated stablecoins to launch sooner, rather than waiting for the full regulatory structure to be completed.

He also pressed the government to reconsider its ban on issuers sharing yield with stablecoin holders. Allowing yield, he argued, would help maintain the Canadian dollar’s international relevance at a time when the global market is overwhelmingly dominated by U.S. dollar-based stablecoins. Today, USD-backed tokens represent well over 90% of global stablecoin supply — an imbalance that several nations and the European Union are actively trying to address.

Matheson’s comments came just days after he appeared publicly with Prime Minister Carney at the Canadian Football League championship game, reflecting ongoing dialogue between policymakers and industry stakeholders.

A Strategic Shift With Global Implications

Canada’s stablecoin policy effort comes at a decisive moment in global digital finance. Jurisdictions across Europe, Asia, and the Americas are racing to define regulatory structures for tokenized money, hoping to attract capital, clarify compliance standards, and ensure monetary sovereignty in an increasingly digital economy.

If implemented, Canada’s framework could help shape norms for non-U.S. currency-backed stablecoins and serve as a reference point for other mid-sized economies. But its competitiveness will depend on how quickly regulators move — and whether the final rules accommodate the incentives and yield structures that dominate international stablecoin demand.

With the Bank of Canada now preparing for a supervisory role, the next phase will focus on refining the rulebook, engaging industry, and determining whether Canada can position itself as a credible player in a market still expanding at double-digit annual rates.