Bank of Canada Considers Regulations for Stablecoins

The central bank of Canada is urging the country to set up a regulatory framework for stablecoins to modernize its payment system and keep pace with other nations advancing such policies.

“You can be on the right path, but if you remain stationary, you’ll be overtaken,” stated Ron Morrow, the executive director of payments, supervision, and oversight at the Bank of Canada, during a speech on Thursday at the Chartered Professional Accountants conference in Ottawa, Canada. A transcript was later published on the bank’s website.

Morrow urged both federal and provincial regulators to formulate a policy framework for stablecoins. “For stablecoins to be accepted as money, they must demonstrate the same safety and stability as the funds in your bank account,” he added:

“Governments are moving towards regulating stablecoins and other cryptocurrencies so that consumers can benefit while being shielded from credit and liquidity risks. Many regions across the globe either currently have or will soon establish a regulatory framework for crypto assets.”

These remarks come during what many in the crypto sector are labeling “stablecoin summer,” referring to the resurgence of stablecoins following the enactment of the GENIUS Act in the United States, which facilitated broader adoption of these assets.

Related: ASIC revises licensing requirements for stablecoin distributors in Australia

Bank of Canada shifts away from central bank digital currency initiatives

In 2022, Canada’s central bank partnered with the Massachusetts Institute of Technology (MIT), a renowned institution for science and technology research, to explore the development of a central bank digital currency (CBDC).

However, in September 2024, the bank decided to halt its CBDC initiatives to concentrate on other priorities, including the creation of a real-time payment system that would enable users to access funds instantly.