Ottawa has started a fast track process to build clear laws for stablecoins, with details planned around 4 November. The move responds to Washington, where the GENIUS Act became law on 18 July 2025 and will be fully active in January 2027. That U.S. law requires one-for-one backing with safe assets and strict anti-money-laundering checks, drawing money and firms south of the border.
Because the U.S. rules are already known, money and firms are heading south of the border. Canadian banks, coin issuers and treasury teams now risk losing their home market if Ottawa does not match the U.S. offer, as clarity and enforcement timelines pull activity into U.S. networks.
The GENIUS Act sets the benchmark with full collateralization and strict compliance. Its requirements force every stablecoin to be backed one-for-one with safe assets and to pass rigorous anti-money-laundering checks, creating a level of certainty that Canada is racing to replicate.
Regulatory push and U.S. pressure
The Bank of Canada wants new rules to keep the national payments system up to date and to prevent credit and liquidity shocks. Officials fear that if Canada stays vague, day-to-day payment flows and longer-term capital will drift into U.S. networks, weakening Ottawa’s grip on monetary policy and on the oversight of clearing and settlement. Full collateralization means each coin is backed by one dollar of cash or other ultra safe assets to keep its one dollar value.
Clear rules will steer money and decide where issuers and custodians base their operations. If Canada writes a regime that looks like the U.S. version, issuers and custodians may stay in Toronto, Montreal or Calgary. If the final text is weaker or slower, traders will send more funds toward coins launched under U.S. law or those coins will dominate order books.
Balance sheet demands will rise under a safe asset rule. Issuers will have to lock more cash besides Treasury bills on their balance sheets, leaving less for other trades or for hedging. Cross-border liquidity, the cost of borrowing dollar-pegged coins and the way corporates treat those coins in their treasuries will all shift once the Canadian text is public.
The next test is the package Ottawa reveals near 4 November — that release will show whether Canada keeps pace with the United States or keeps losing business to it.
