The Bank of Canada has called for the regulation of stablecoins at the national level

Key points:

• The Bank of Canada has called for the regulation of stablecoins in order to keep pace with global innovations in the field of payments.
• Ron Morrow, head of the central bank’s payments department, has called for the adoption of rules at the federal level.
• The Canadian banking regulator OSFI is developing a regulatory framework with a focus on licensing, reserves, and consumer protection.

The Bank of Canada has expressed concern about the country’s weak participation in the modernization of the payment system. Officials said that a regulatory framework for stablecoins needs to be implemented quickly.

Ron Morrow, the central bank’s executive director of payments supervision and oversight, said Canada will have to consider regulating stablecoins at the national level. He noted that momentum is gaining momentum not only in the United States but around the world.

According to Morrow, for stablecoins to function as real money, they must be as safe and stable as a bank account.

Canada urged to take the lead

The bank noted that major economies are moving forward with the development of digital currencies. The US recently passed the GENIUS Act to regulate stablecoin issuers, and the EU is preparing to implement the Markets in Crypto-Assets (MiCA) regulation. Both documents focus on transparency, reliable reserves, and consumer protection.

The Office of the Superintendent of Financial Institutions (OSFI) has confirmed that it is preparing its own regulatory framework. It will take into account licensing, redemption rights, and reserves from issuers. The regulator also said it’s ready to experiment with digital assets if they can be easily tracked.

Possible challenges

Supporters of these measures worry that different rules adopted by provinces will slow down innovation. Authorities recommend developing uniform standards at the federal level.

The Bank of Canada also warned that without strict rules, stablecoins could collapse under the pressure of liquidity crises or ineffective management. Morrow stressed that Canadians must be reliably protected from risks, given the experience of crypto project failures around the world.