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Bank of Canada details strict stablecoin standards
The Bank of Canada has outlined stringent standards for stablecoins as Canada prepares a formal regulatory framework in 2026. Governor Tiff Macklem emphasized that any stablecoins issued or marketed within Canadian borders should operate like reliable forms of money and be fully backed by assets that maintain convertibility to cash at par.
Key requirements for fiat-backed stablecoins
Under the Bank of Canada's guidance, stablecoins must be pegged 1:1 to a central bank currency and backed exclusively by high-quality liquid assets, such as government securities. Issuers will need to provide full transparency on redemption mechanics, timing, fees, and conversion terms so consumers and businesses can understand how tokens convert into cash. Operational resilience is another core requirement: stablecoin systems must be robust enough to withstand operational stress without interrupting redemptions or payment activity.
Transparency, redemption and operational resilience
Issuers are expected to disclose redemption conditions and maintain liquidity that ensures tokens can always be converted to fiat currency at par value. The Bank of Canada stressed the importance of clear, accessible disclosures and strong operational safeguards to build public confidence in stablecoin use for payments and store-of-value functions.
Regulatory roadmap and collaboration with Department of Finance
The central bank will work closely with the Department of Finance Canada to draft formal rules in 2026. The federal budget for 2025 already included provisions to oversee stablecoin activity as part of a broader push to modernize digital finance. As part of this package, the Bank of Canada is expected to receive funding to help administer the new framework and coordinate oversight.
Legal and oversight changes
Budget documents indicate amendments to the Retail Payment Activities Act to extend oversight to payment service providers handling stablecoin transactions. The legislation is also expected to include national security safeguards to preserve the integrity of the payments system and protect consumers and businesses using fiat-backed stablecoins.
Implications for the crypto industry
Canada aims to align with jurisdictions such as the United States that are actively developing stablecoin policy, while prioritizing consumer protection and long-term trust. For issuers and crypto payment providers, the new rules mean increased compliance requirements: transparent redemption terms, high-quality liquid asset backing, and strong operational risk management. For users, these standards are intended to make stablecoins a safer, more reliable option for payments, remittances, and everyday commerce.
Next steps and timing
Draft rules will be developed in 2026, and market participants should prepare for tighter regulation of fiat-backed stablecoins and expanded oversight of retail payment providers. Ecosystem players — issuers, custodians, wallets, and exchanges — should review liquidity policies, redemption processes, and disclosure practices now to meet the upcoming regulatory bar and support wider adoption of regulated stablecoin solutions.
Source: crypto
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