Canada has rolled out its first national framework for stablecoins under the 2025 federal budget, marking a major step toward regulating digital assets in the country. The new rules, unveiled in the Canada Strong Budget 2025, are designed to ensure greater transparency, security, and consumer protection in the fast-growing stablecoin market.
Under the plan, the Bank of Canada will allocate $10 million over the next two years to oversee the implementation of the rules, with ongoing costs of around $5 million annually, expected to be recovered from regulated stablecoin issuers. These issuers will be required to maintain full reserves, provide clear redemption terms, and adopt strict measures to safeguard users’ personal and financial information.
The move aligns Canada with recent global developments in digital asset regulation, following the United States’ Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, signed into law by President Donald Trump in July 2025. Like the U.S. framework, Canada’s regulations seek to bring clarity and oversight to stablecoin operations, which have expanded rapidly over the past few years.
Stablecoins, which are digital tokens pegged to traditional assets like the U.S. dollar, have grown increasingly popular for their ability to offer the convenience of cryptocurrencies without the same degree of volatility. According to the U.S. Treasury, the global stablecoin market now exceeds $300 billion and could surge to $2 trillion by 2028. Financial service providers, including Western Union, SWIFT, MoneyGram, and Zelle, are already experimenting with stablecoin-based payment systems to improve transaction efficiency.
Western Union recently announced plans to issue its own dollar-backed token, the USD Payment Token (USDPT), on the Solana blockchain in 2026. The initiative aims to cut costs and speed up cross-border payments by leveraging Solana’s scalability and low transaction fees.
While Canada previously halted the development of a central bank digital currency (CBDC) in 2024, policymakers now view stablecoins as a viable route to modernise national payment systems. Officials believe the new framework could help make domestic and international transactions more seamless while preserving financial stability.
The government has not yet revealed when the legislation will be formally introduced or what national security standards will accompany it. Nonetheless, the budget underscores Canada’s commitment to keeping pace with international digital finance reforms.
Globally, other jurisdictions are also tightening oversight. Hong Kong recently began enforcing a licensing regime for both local and foreign issuers offering HKD- or USD-backed stablecoins to residents. In Japan, Minna Bank is experimenting with stablecoin payments through Web3 wallets, allowing customers to make everyday purchases using blockchain technology.
Canada’s move signals that the country is positioning itself as a key participant in the next era of regulated digital finance.
