Canada is taking a decisive step towards regulating fiat-backed stablecoins under its 2025 federal budget. This move aims to bolster secure digital payments and support the growth of financial innovation. The Bank of Canada will provide funding for oversight, allocating $10 million over two years. 🇨🇦 The new framework, outlined in the federal budget, ensures issuers maintain adequate reserves and implement robust risk management mechanisms. Stablecoins issued with fiat backing will face stricter regulations to guarantee transparency and consumer protection. This proactive approach aims to solidify Canada’s position as a leader in global stablecoin regulation. The move reflects growing adoption of stablecoins globally, particularly by institutions like Western Union, SWIFT, MoneyGram, and Zelle, who are integrating these solutions into their payment systems. Canada’s commitment to innovation is evident in its focus on developing digital Canadian dollar equivalents through platforms like Tetra Digital, fueled by investment from major financial institutions. The Bank of Canada has expressed concerns about the potential consequences of delaying stablecoin regulation, urging swift action to avoid being left behind in the global technological evolution.