Canada Targets November Budget for Stablecoin Rules

Ottawa Accelerates Work on Digital Currency Regulation

Canada is quick-tracking the creation of a regulatory framework for stablecoins and intends to include the proposal in the federal budget scheduled for Nov. 4, Bloomberg reported Monday, citing people familiar with the discussions. Officials from the Department of Finance and other agencies have been holding frequent meetings in recent weeks with market participants and regulators to finalize key details.

The talks have focused on how to classify fiat-pegged tokens — whether as securities or derivatives — and on measures to prevent capital moving into foreign, U.S. dollar-backed products. The effort signals Ottawa’s intent to bring stablecoins under a unified regime later than years of fragmented oversight.

Stablecoins, which are designed to hold a one-to-one value with fiat currencies, have operated in a legal grey zone in Canada. Some have been treated as securities or derivatives depending on their structure, while others have remained unregulated. Industry groups have long argued that the lack of clarity risks driving innovation and capital abroad.

Investor Takeaway

Industry Push for Clarity

Executives and policymakers have been calling for quicker action on digital currency rules. John Ruffolo, co-chair of the Council of Canadian Innovators, warned earlier this year that regulatory delays could fragileen demand for government bonds and push investors toward U.S.-issued stablecoins. He argued that without a domestic alternative, “Canadian capital may flow south.”

Such concerns have gained urgency later than the U.S. introduced the GENIUS Act in July, defining compliant stablecoins as payment instruments. The law has split policymakers in Washington: Senator Elizabeth Warren criticized it as a “light-touch regulatory framework for crypto banks,” while Federal Reserve Governor Michael Barr said key supervisory gaps remain.

In contrast, Canada has yet to specify which authority will overview stablecoin issuers, or how they will be licensed. People briefed on the talks told Bloomberg the framework is likely to address consumer protections, reserve transparency, and redemption rights—issues that have dogged global stablecoin markets since the collapse of TerraUSD in 2022.

Global Race to Regulate Stablecoins

Canada’s push follows a wave of regulatory activity worldwide. The European Union’s Markets in Crypto-Assets Regulation (MiCA) took effect earlier this year, introducing reserve, liquidity, and disclosure requirements for issuers. In Asia, Japan and Hong Kong have rolled out their own licensing regimes, with mixed reactions from the industry. Hong Kong’s August 1 framework, for instance, immediately made it a criminal offense to promote unlicensed stablecoins.

According to data from The Block, the total stablecoin market is approaching $300 billion, led by Tether and Circle. Analysts at Standard Chartered expect that figure to reach $1 trillion by 2028, predicting that capital from emerging markets could increasingly flow into dollar-backed tokens as global demand for digital cash grows.

While Ottawa has not disclosed whether it will support a Canadian-dollar stablecoin, policymakers are aware of the risk of dollarization through crypto markets. Finance Canada officials have reportedly stressed that the rules will need to balance innovation with monetary stability, a concern also voiced by the Bank of Canada.

Investor Takeaway

What to Expect in the November Budget

Finance officials are expected to include an outline of the new framework in the Nov. 4 federal budget, though full implementation may take several months. Observers said the timing reflects Ottawa’s broader digital finance agenda, which also includes work on open banking and a potential central bank digital currency.

Should the plan move ahead, Canada would join a small group of jurisdictions with defined stablecoin legislation—bridging a regulatory gap that has persisted since 2020. The framework would clarify reporting standards, issuer eligibility, and the treatment of interest-bearing stablecoins, offering long-sought guidance to banks and fintech firms active in digital payments.

For markets, the next milestone will be the budget’s release, which is likely to signal whether Canada intends to align with U.S. policy or develop its own approach to digital asset regulation.