Canada’s 2025 budget includes a significant new step in regulating stablecoins, aiming to address growing concerns about the financial stability of this fast-growing sector. To ensure user confidence, issuers of stablecoins (cryptocurrencies pegged to fiat currencies like the Canadian or US dollar) will be required to maintain substantial reserves mirroring the value of their issued tokens. This measure is a direct response to the TerraUSD collapse which underscored the need for enhanced stability mechanisms. The government emphasizes that these reserves must be held in safe and readily liquid assets, undergoing regular audits. 2025 marks a major shift towards regulating digital assets as Canada follows the lead of the United States’ GENIUS Act in this area. The regulations will include stringent risk management frameworks, requiring issuers to demonstrate their operational security and transparency. These requirements will be established through stakeholder consultations, involving crypto firms, financial institutions, and consumer protection groups. This approach aims for a collaborative, not an adversarial, regulatory landscape.