Canada Pushes Stablecoin Rules Ahead of Budget
The Canadian government is expediting regulations for stablecoins, aiming to establish a clear framework ahead of the November 4 federal budget, which will be presented by Finance Minister François-Philippe Champagne.
According to John Ruffolo, founder of Maverix Private Equity and vice chair of the Council of Canadian Innovators, the move is crucial to prevent Canadian capital from flowing south into U.S.-based stablecoins.
He also cautioned that without local regulation, U.S. regulators could gain indirect control over Canadian capital, undermining the Bank of Canada’s ability to manage the money supply.
U.S. Stablecoins Threaten Canadian Financial Control
Ruffolo reiterated that every Canadian transaction using a U.S.-backed stablecoin effectively funds U.S. government debt, since the GENIUS Act requires such tokens to be backed by U.S. Treasury bills.
This dynamic, he argued, channels value and data southward, making the Canadian economy increasingly dependent on the United States.
Mirza Shaheryar Baig, a foreign exchange strategist at Desjardins, echoed the concern, noting that over 99% of the stablecoin market is currently denominated in U.S. dollars, creating a structural imbalance.
Calls for a Federal Regulatory Framework
In September, Ron Morrow of the Bank of Canada (BoC) called for federal-level stablecoin regulation, pointing out that the absence of national rules has already drawn criticism from financial watchdogs, including the Office of the Superintendent of Financial Institutions (OSFI).
Carolyn Wilkins, a former senior deputy governor at the BoC, also argued that Canada needs a competitive regulatory environment to support innovation in Canadian-dollar payments and maintain monetary stability.
Stablecoins Surge in Use - and Risk
According to the Bank of Canada, daily stablecoin transactions now exceed US$2.7 billion, with annual usage nearing US$1 trillion - yet the sector remains largely unregulated domestically.
The BoC warned that this “supervisory gap” poses risks to economic stability, consumer protection, and systemic integrity. The bank said pegging tokens to fiat currency and introducing clear legislation could help reduce volatility and bolster trust in digital assets.
The BoC urged the government to establish a coordinated federal framework, uniting anti-money laundering and securities regulations under a single, modernized system for digital assets.
Global Pressure Builds for Action
Internationally, the Bank for International Settlements (BIS) has also warned of the potential misuse of unregulated stablecoins, urging nations to adopt clear and asset-backed regulatory regimes.
Canadian officials believe that doing so could strengthen Canada’s global financial standing, especially as countries like Japan, Singapore, and the U.S. push ahead with stablecoin legislation.
For now, Ottawa’s challenge is balancing innovation and monetary sovereignty, as the stablecoin economy rapidly transforms cross-border finance.
If the federal budget includes clear guidance, Canada could finally take a decisive step toward stablecoin regulation - or risk watching its financial influence drift across the border.
