Canada’s central bank will approve only fiat-backed, high-quality stablecoins to ensure they are “good money” as part of the country’s plan to modernize its financial system.
News
The Bank of Canada has signaled it will only approve high-quality stablecoins tied to central bank currencies to ensure stablecoins serve as “good money” under the country’s upcoming stablecoin regulations, expected in 2026.
“We want stablecoins to be good money, like bank notes or money on deposit at banks,” Governor Tiff Macklem the Montreal Chamber of Commerce on Tuesday.
Stablecoins should be pegged 1:1 to fiat: Macklem
Macklem the stablecoins to be pegged at a one-to-one ratio to a central bank currency and backed by “high-quality liquid assets” that can be easily converted into cash. Such assets typically include Treasury bills and government bonds.
His comments follow Canada’s lengthy , published early November, which said stablecoin issuers would be required to hold sufficient reserves, establish redemption policies, and implement various risk management frameworks, including measures to protect personal and
Canada is one of several countries looking to modernize its financial system by making digital transactions faster, cheaper, and more secure for its more than 40 million people.
“The goal is to ensure Canadians can leverage the innovation of stablecoins and do so safely,” Macklem said.
Coinbase Canada CEO Lucas Matheson CBC last month that the proposed stablecoin rules would “change how Canadians interact with money and the internet forever.”
Canada’s stablecoin plan to complement banking
Stablecoin regulatory momentum in Canada picked up after the US passed the in mid-July, seen as one of the most comprehensive stablecoin frameworks to date.
The UK and Hong Kong have also with stablecoin rules in recent months.
Related:
The stablecoin market currently at $313.6 billion, with the US Treasury estimating in April that it would reach.
Canada is also establishing a “Real-Time Rail” payments system to facilitate instant settlements between businesses and consumers, along with an open banking framework that will enable people to switch banks more easily.
Meanwhile, Canada scrapped plans to issue a in September 2024, with Macklem stating at the time that there wasn’t a compelling case to move forward with it.
Magazine:
