Canada Considers Enhanced Regulation of Stablecoins to Secure Payment Infrastructure

The Bank of Canada has emphasized that stablecoins, which already move trillions in payments globally, must reach a level of security equivalent to that of a bank account before being more deeply integrated into regular payment systems. At the CPA conference in Ottawa, Ron Morrow, Senior Deputy Governor, discussed the opportunities and risks these digital currencies present to Canada's payment infrastructure. While welcoming the possibilities for modernization, he advised caution. Canada sees potential challenges particularly in international payments. The costs for cross-border money transfers are significantly higher than in the United States or the United Kingdom, which particularly affects migrant communities sending money abroad. Stablecoins could significantly reduce these costs, according to Jagdish Pandya from Blockon Ventures, which would be a huge relief for many immigrants. Compared to cryptocurrencies like Bitcoin, which Morrow compared to shares of a tech start-up, stablecoins are linked to government currencies like the US dollar, thus maintaining their stable value. However, there are currently no nationwide regulations for stablecoins in Canada; regulation is up to the provinces and is supplemented by national anti-money laundering laws. Morrow advocated for national regulation. A survey showed that nearly 60% of Canadian business leaders fear the country’s competitiveness could decline without innovation in payment systems. Musheer Ahmed from Finstep Asia warned that Canadian companies could fall behind in global competition if they do not have the chance to test new payment innovations locally. Manhar Garegrat from Liminal Custody emphasized that the success of a Canadian stablecoin depends on its integration into local payment systems and clear regulatory guidelines.