Canada to Overhaul Stablecoin Regulation with 2024 Budget
Canada plans to introduce a dedicated stablecoin regulation framework in its Nov. 4, 2024 federal budget to modernize the payment system and align with the US GENIUS Act. Currently, Canada lacks unified stablecoin regulation, treating some tokens under securities and derivatives laws. The Bank of Canada has urged clearer rules to protect consumers from credit and liquidity risks. Domestic issuers such as Stablecorp’s QCAD (1:1 CAD-backed) operate at limited scale, while USDC and USDT dominate the Canadian market. The US GENIUS Act, effective January 2027, mandates full collateralization, AML safeguards, and regular audits, spurring USD-pegged stablecoins beyond $300 billion in market cap. Canada’s proposed stablecoin regulation aims to boost innovation, enhance consumer protection, and align with international standards.
Bullish
By introducing a clear stablecoin regulation framework alongside the 2024 federal budget, Canada reduces legal uncertainty and paves the way for new issuers and greater adoption of stablecoins. Traders can expect enhanced market confidence and liquidity, particularly if domestic tokens like QCAD gain traction under standardized rules. In the short term, compliance costs may cause minor adjustments, but the long-term effect is a more robust and regulated stablecoin market in Canada, aligning with the US GENIUS Act and international standards. Overall, clearer rules support innovation and consumer protection, generating a bullish outlook for stablecoin trading.