Budget 2025 Proposes To Introduce Federal Stablecoin Legislation

As anticipated, the federal government has announced in Budget 2025 its intention to regulate the issuance of fiat-backed stablecoins in Canada. The proposed legislation will require issuers to maintain and manage adequate asset reserves, establish redemption policies, implement risk management frameworks, and protect the sensitive and personal information of Canadians. The legislation will also include national security safeguards to support the integrity of the framework so that fiat-backed stablecoins are safe and secure for consumers and businesses to use.

The Bank of Canada will administer the new regime for non-prudentially regulated issuers in Canada. Related amendments to the Retail Payment Activities Act (RPAA) will also be made to enable the regulation of payment service providers that carry out payment functions using prescribed stablecoins. To date, the RPAA has expressly excluded digital assets from the scope of payment activities that must be