Canada Plans Stablecoin Regulation Details in November Budget Amid Global Competition

Canada is urgently advancing a comprehensive regulatory framework for stablecoins, with details expected to be unveiled in the federal budget on November 4 by Finance Minister François-Philippe Champagne. This initiative responds to growing global momentum, particularly following the U.S. passage of the Genius Act, which classifies compliant stablecoins as payment instruments and grants regulators oversight powers. Canadian regulators have faced uncertainty, sometimes treating stablecoins as securities or derivatives, complicating the development of stablecoin-related services within the country. Industry leaders, including John Ruffolo, warn that a lack of clear rules risks driving Canadian capital to U.S.-backed stablecoins, potentially weakening demand for Canadian bonds and reducing the Bank of Canada's control over monetary policy. The federal framework, being developed with input from the Office of the Superintendent of Financial Institutions, the Department of Finance, and the Bank of Canada, aims to clarify issuer eligibility, reserve requirements, and consumer protections. This regulatory push aligns Canada with other major economies, striving to balance financial innovation with monetary stability and prevent capital flight amid intensifying international competition.