Canada sets stablecoin standard…requires 1:1 peg to fiat currency

The Bank of Canada has proposed a principle that, under future stablecoin regulations, only high-quality stablecoins pegged to fiat currency will be allowed. This reflects the view that, in the course of modernizing the financial system, stablecoins should function as a reliable means of payment comparable to bank money.

On the 17th (local time), Cointelegraph reported that the Bank of Canada said it will only approve high-quality stablecoins linked to central bank money under the stablecoin regulations planned for introduction in 2026. Tiff Macklem, Governor of the Bank of Canada, emphasized in a speech to the Montreal Chamber of Commerce that "stablecoins should be 'good money' like banknotes or bank deposits."

Governor Macklem said stablecoins should be pegged 1:1 to central bank money and backed by high-quality liquid assets that can be converted to cash at any time. He cited assets such as government bonds and short-term government securities (T-bills) as typical reserve assets. This is intended to ensure the credibility and redeemability of stablecoins.

These remarks are in line with the Canadian government's 2025 budget report released in November last year. The report stated that stablecoin issuers must hold sufficient reserves, establish clear redemption policies, and build risk management frameworks to protect personal and financial data.

Canada is pursuing financial system modernization to make digital payments faster, cheaper, and safer for more than 40 million people. Macklem said, "The goal is to allow Canadians to harness the innovation of stablecoins while using them safely."

The industry also expects regulatory clarity. Lucas Madderson, CEO of Coinbase Canada, said in a recent interview with local broadcaster CBC that the proposed stablecoin regulations would fundamentally change the way Canadians use money and the internet.

Canada's stablecoin discussions are also aligned with global trends. Since the U.S. passed the GENIUS Act in July to establish a comprehensive stablecoin regulatory framework, the U.K. and Hong Kong have also been accelerating the introduction of related rules. The global stablecoin market is estimated at about $313.6 billion, and the U.S. Treasury forecasts it will grow to $2 trillion by 2028.

Meanwhile, Canada is pursuing an open banking system alongside the construction of a real-time payment system called 'Real-Time Rail' that enables instant payments between businesses and consumers. However, it withdrew plans to pursue a central bank digital currency (CBDC) in September last year. At the time, Governor Macklem said there was no clear need to introduce a CBDC.