**Stablecoin News: Canada Allocates $10 Million to Launch Stablecoin Regulation Program**
Canada is making significant strides in regulating stablecoins by committing $10 million to establish a stablecoin supervision program. This initiative is part of the federal budget for 2025 and aims to introduce comprehensive legislation governing fiat-backed stablecoins, following similar moves by the United States.
In July, the U.S. passed landmark laws regarding stablecoins, setting a precedent that Canada is now following. Under the new Canadian legislation, stablecoin issuers will face stringent requirements. They must maintain sufficient reserves and implement clear redemption policies to protect consumers. These rules are designed to foster trust and stability in the rapidly evolving digital currency market.
**New Legislation Targets Non-Bank Canadian Dollar Stablecoins**
The government’s 2025 budget, published on Tuesday, outlines specific plans for regulating stablecoins issued by non-bank entities. These issuers of Canadian dollar-backed stablecoins will be subject to various risk management frameworks. Among the measures are protections for personal and financial data, emphasizing customer privacy and security.
Additionally, the Canadian government has pledged $10 million over two years, beginning in the 2026-27 fiscal year, to fund the establishment of the stablecoin supervision program. This program is a key component of Canada’s broader payments modernization strategy.
The initiative also addresses national security concerns related to stablecoin issuers, ensuring that they comply with established standards. By doing so, Canada aims to create a robust regulatory environment that supports innovation while safeguarding the financial system.
**Funding and Sustainability**
The initial $10 million funding will be allocated from the central bank’s resources, covering the first two years of the program. Afterward, administrative costs are expected to be around $5 million annually. These ongoing expenses will be funded through fees charged to stablecoin issuers, making the program financially self-sustaining.
**Key Regulatory Requirements**
Beyond funding and supervision, the upcoming legislation will require stablecoin issuers to:
– Maintain adequate asset reserves backing their stablecoins.
– Develop and enforce clear redemption policies that protect holders.
– Comply with privacy standards to safeguard customer data.
– Meet national security requirements to prevent misuse.
These comprehensive measures aim to establish a strong regulatory framework that balances innovation with consumer protection and financial stability.
**Regulatory Framework Updates**
To accommodate these changes, amendments will be made to the Retail Payment Activities Act. These adjustments are expected to refine regulatory oversight of payment systems and stablecoin activities, ensuring alignment with evolving market conditions and technological advancements.
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*Related Reading:*
Crypto News: Canada to Unveil Stablecoin Rules in November Budget | Live Bitcoin News
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With this initiative, Canada strengthens its position in the digital currency space by ensuring a secure and well-regulated environment for stablecoins, protecting both consumers and the integrity of the financial system.
https://bitcoinethereumnews.com/tech/stablecoin-news-canada-allocates-10-million-to-launch-stablecoin-regulation-program/
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