Bank of Canada Pushes GENIUS Act Stablecoin Rules
The Bank of Canada has urged federal and provincial authorities to establish a unified stablecoin regulation framework. Citing global peers, director Ron Morrow advocates rules akin to the U.S. GENIUS Act—mandating 1:1 reserves, regular audits and strict AML/KYC—to secure cross-border payments and reduce Canada’s high remittance fees. After shelving a 2024 CBDC pilot, the central bank is refocusing on real-time payments and private stablecoins. Canada’s current provincially driven oversight lacks the consistency of U.S. and EU regimes, risking innovation and financial stability. A “same activity, same risk, same regulation” approach would protect consumers, enhance transparency and attract fintech. A robust stablecoin regulation framework could prevent businesses and individuals from turning to foreign systems, safeguarding Canada’s competitiveness in digital finance.
Bullish
This news provides clarity on stablecoin regulation by proposing a unified federal framework similar to the U.S. GENIUS Act. Regulatory certainty typically encourages adoption of digital assets by reducing legal and operational risks. For crypto traders, clear rules can expand stablecoin utility in cross-border payments and everyday transactions, likely boosting demand and liquidity. In the short term, markets may see moderate position adjustments as traders price in policy developments. Over the long term, a robust stablecoin regulation framework in Canada should support stablecoin growth, enhance institutional participation and solidify stablecoins’ role in the digital finance ecosystem—overall a bullish catalyst.