Canada has introduced its first federal rules for stablecoins, digital currencies backed by cash or other assets, under the 2025 federal budget.
The Canada Strong Budget 2025 reveals that the Bank of Canada will spend $10 million over two years to supervise the rollout of these regulations. Later, the costs, around $5 million per year, will be recovered from stablecoin issuers regulated under the new framework.
The move also follows the Guiding and Establishing National Innovation for U.S. Stablecoins (the GENIUS Act), signed into law by the U.S. President Donald Trump in July 2025, that set the first clear federal regulations for stablecoins.
The legislation will require issuers to maintain full reserves, implement clear redemption policies, and strengthen safeguards for personal and financial data.
Global stablecoin tends
Stablecoins are gaining global traction because they combine the convenience of cryptocurrencies with lower volatility than cryptocurrencies like Bitcoin. The global stablecoin market is valued at over $300 billion and is expected to reach $2 trillion by 2028, according to the U.S. Treasury.
Financial institutions such as Western Union, SWIFT, MoneyGram, and Zelle are exploring or planning stablecoin-based solutions.
Last month, Western Union announced that it plans to issue a U.S. dollar-backed stablecoin called the USD Payment Token (USDPT) on the Solana blockchain in 2026. The token is intended to support faster and lower-cost cross-border transfers by reducing reliance on traditional banking systems. Solana was selected for its transaction speed, scalability, and low costs.
Canada’s payment modernization effort
Although the Bank of Canada abandoned its central bank digital currency (CBDC) project in September 2024, officials now see stablecoins as a way to modernize payments, making them faster, cheaper, and more secure for Canadians.
The government has not yet announced when the legislation will be introduced or detailed the specific national security safeguards it will require. The budget signals a broader effort to ensure Canada keeps pace with global developments in digital payments and the expanding crypto market.
Stablecoin regulations around the world
Several countries have recently introduced rules for stablecoins as part of a broader effort to regulate digital payments. Hong Kong implemented new stablecoin rules requiring all local and overseas issuers offering HKD- or USD-backed tokens to residents to obtain a license. The Hong Kong Monetary Authority (HKMA) stated no licenses had been granted yet, and unlicensed operations were illegal.
In July 2025, Japanese digital bank Minna initiated an experiment that uses stablecoins and Web3 wallets to make simple, everyday payments. The bank tested stablecoins on Solana and used Web3 wallets to enable users to manage money more easily.
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