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The Government of Canada is finalizing a comprehensive regulatory framework for stablecoins, expected to be officially announced in the federal budget on November 4, according to government officials familiar with the matter.
🇨🇦 JUST IN: Canada is set to unveil stablecoin rules in its next federal budget to mirror the U.S. GENIUS Act.
Could this reshape the country’s entire crypto landscape? pic.twitter.com/uRGdnBpNyq
— Cointelegraph (@Cointelegraph) October 27, 2025
The move follows weeks of consultations between federal regulators, provincial authorities, and industry stakeholders, as Ottawa races to align its approach with new international standards, particularly following the recent enactment of the U.S. GENIUS Act, which established a clear legal foundation for payment stablecoins south of the border.
Current Challenges and the New Framework
Canada’s existing digital-asset oversight is fragmented, divided between provincial securities regulators and the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). The resulting regulatory ambiguity has long been viewed as a major obstacle to market growth.
The Canadian Securities Administrators (CSA) currently classify stablecoins as “value-referenced crypto assets,” treating them as securities or derivatives , a stance that diverges sharply from other major jurisdictions.
By contrast, the U.S. GENIUS Act defines payment stablecoins as non-securities, non-commodities, while the European Union’s MiCA framework similarly excludes them from securities classification.
Ron Morrow, Executive Director of Payments at the Bank of Canada, stressed the importance of regulatory clarity in a September 18 address, noting that the government is “moving to regulate stablecoins and other digital assets so consumers can benefit while being protected from credit and liquidity risks.”
Protecting Financial Sovereignty and Capital Flows
Canada’s accelerated regulatory timeline is driven by a desire to prevent capital flight into U.S. dollar-denominated stablecoins and to safeguard monetary sovereignty.
John Ruffolo, Co-Chair of the Council of Canadian Innovators, warned that regulatory delays “could weaken demand for Canadian sovereign debt and undermine the Bank of Canada’s control over monetary policy.”
With the U.S. having finalized its stablecoin legislation, pressure is mounting on Canadian policymakers to harmonize rules internationally. Divergent regulations, analysts caution, risk isolating Canada from emerging cross-border payment ecosystems powered by stablecoins.
Industry participants have echoed these concerns, warning that without regulatory alignment, Canadians may increasingly rely on foreign-issued stablecoins and infrastructure, eroding the domestic financial system’s influence.
Global Competition and Domestic Innovation
The global stablecoin market is nearing $300 billion in circulation, with U.S. dollar-pegged tokens dominating issuance and trading volume. As regions such as Europe, Japan, and Hong Kong advance their own frameworks, competition to attract compliant stablecoin innovation is intensifying.
The Bank of Canada recently acknowledged that the country is “falling behind global peers” in stablecoin regulation, pledging to fast-track efforts to build a coordinated federal framework.
Despite regulatory uncertainty, Canadian fintech innovation continues to accelerate. Tetra Digital Group recently raised $10 million to launch a Canadian-dollar-denominated stablecoin, backed by Shopify, Wealthsimple, and National Bank Financial. Similarly, Stablecorp secured about $3.6 million USD in September to expand its fully-reserved, auditable stablecoin QCAD.
The International Monetary Fund (IMF) has noted that stablecoins are “restructuring liquidity, payments, and economic stability”, unlocking programmability features and enabling seamless integration into global digital platforms.
Canada’s forthcoming framework is expected to determine how the country positions itself within this rapidly evolving $300 billion global digital money economy.
