Bank of Canada lays out criteria for ‘good money’ stablecoins

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 told the Montreal Chamber of Commerce on Tuesday.

Stablecoins should be pegged 1:1 to fiat: Macklem

Macklem wants 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 2025 budget report, 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 financial data.

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 told 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 GENIUS Act in mid-July, seen as one of the most comprehensive stablecoin frameworks to date.

The UK and Hong Kong have also moved forward with stablecoin rules in recent months.

Related: UK regulator consults on crypto rules for exchanges, lending and DeFi

The stablecoin market currently sits at $313.6 billion, with the US Treasury estimating in April that it would reach $2 trillion by 2028.

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 central bank digital currency in September 2024, with Macklem stating at the time that there wasn’t a compelling case to move forward with it.