Bank of Canada sets ‘good money’ stablecoin rules

Canada’s central bank is setting out a clear vision for how stablecoins should operate as part of the country’s effort to modernise its financial system. The Bank of Canada has said it will approve only high-quality, fiat-backed stablecoins that meet strict standards, ensuring they function as what policymakers describe as “good money” under a new regulatory framework expected to take effect in 2026.

Speaking to the Montreal Chamber of Commerce, Bank of Canada Governor Tiff Macklem emphasised that stablecoins must mirror the reliability of traditional money. He said the central bank wants stablecoins to behave like bank notes or deposits held at regulated financial institutions, offering confidence, stability and trust to users in an increasingly digital economy.

Macklem explained that eligible stablecoins should be pegged on a one-to-one basis with a central bank currency and backed by high-quality liquid assets that can be quickly converted into cash. These assets would typically include Treasury bills and government bonds, ensuring issuers can meet redemption demands even during periods of market stress.

The comments follow Canada’s 2025 federal budget report, which outlined proposed requirements for stablecoin issuers, including sufficient reserves, clear redemption policies and robust risk management systems to protect personal and financial data. Industry figures have welcomed the direction, with Coinbase Canada chief executive Lucas Matheson saying the rules could fundamentally reshape how Canadians interact with money and the internet. Canada’s regulatory push also aligns with recent moves by the United States, the UK and Hong Kong to bring stablecoins firmly within formal financial oversight.