Canada Mandates 1:1 Treasury Backing for All Stablecoins

• Canada will permit only stablecoins pegged one-to-one to a central bank currency like the Canadian dollar.
• Approved stablecoins must be backed by high-quality liquid assets such as government bonds and Treasury bills.
• Issuers will face strict reserve, redemption, and risk management requirements under the new framework.

Canada’s central bank says only tightly controlled stablecoins will be allowed in the country’s financial system. 

Bank of Canada Governor Tiff Macklem said approved stablecoins must be pegged one-to-one to a central bank currency, such as the Canadian dollar, and fully backed by high-quality liquid assets.

The ‘Good Money’ Mandate

Those assets must be easy to convert into cash, with government bonds and Treasury bills cited as acceptable examples. Stablecoins backed by riskier investments or complex financial structures are unlikely to qualify.

“We want stablecoins to be good money, like bank notes or money on deposit at banks,” he said.

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Bitcoin Is Not Money: The Central Bank’s Rationale

Macklem stressed that most cryptocurrencies fail to meet the basic requirements of money. He pointed to Bitcoin’s sharp price swings and limited use in everyday payments as reasons it cannot function as reliable currency.

Stablecoins, he said, could play a role in modern payments only if they avoid the same risks that have caused instability in the crypto sector. Without strict rules, regulators fear stablecoins could expose consumers to losses, sudden freezes, or redemption failures.

What Rules Will Stablecoin Issuers Face?

Under the proposed framework, stablecoin issuers would be required to hold enough reserves to cover every coin in circulation. They would also need clear redemption rules, including how quickly users can get their money back and whether fees apply.

Issuers would have to implement strong risk management systems, including protections for personal and financial data. Regulators want to ensure stablecoins remain usable even during periods of market stress.

“And issuers of stablecoins must have enough operational resilience to make stablecoins reliable,”  Macklem added.

2026 Timeline: Federal Government Moves In

The federal government recently announced plans to introduce a dedicated legal framework for stablecoins. The Bank of Canada would act as the main regulator, while existing retail payments laws would be expanded to cover stablecoin transactions.

Officials say this approach aims to balance innovation with safety, allowing new payment tools while limiting risks tied to fraud and financial instability.

When Will the Rules Take Effect?

The Bank of Canada expects the new stablecoin regulations to be finalized around 2026. Until then, officials will work with the Department of Finance to refine the rules.

For now, the central bank’s message is clear: stablecoins may be allowed in Canada, but only if they behave like traditional money and meet strict standards designed to protect users and the financial system.

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