Canada Plans New Stablecoin Rules Ahead of November Budget

Highlights:

• Canada speeds up stablecoin rules after $126 million crypto anti-money laundering fine.
• Officials aim to clarify regulations as the U.S. already sets stablecoin standards.
• Delays risk Canadian investors shifting to U.S. stablecoins, weakening local financial control.

Canada is moving fast to make rules for stablecoins before the November 4 federal budget. This comes just days after a crypto company was fined $126 million for breaking anti-money laundering laws. According to a Bloomberg report, officials have been talking with regulators and industry leaders for weeks. 

Finance Minister François-Philippe Champagne will present new rules in the budget. These rules aim to make the market clearer for everyone. Stablecoins connect digital money to normal banking. In Canada, they are now treated as securities or derivatives. This has confused investors and companies.

According to Bloomberg, Canada is accelerating the development of its stablecoin regulatory framework, with details expected to be officially announced in the federal budget to be presented by Finance Minister François‑Philippe Champagne on November 4. Government officials…

— Wu Blockchain (@WuBlockchain) October 27, 2025

Canada wants to keep investors and protect bonds. If rules are slow, people may prefer US stablecoins. This could weaken Canadian financial control. In contrast, the United States has already enacted the Genius Act in July, granting regulators the authority to oversee stablecoin issuers and establish reserve standards. This legislation treats compliant stablecoins as payment instruments, a move that has been largely welcomed by the crypto industry. The swift implementation of such regulations in the U.S. has prompted Canadian officials to expedite their own regulatory processes to maintain competitiveness in the global financial market.

Delays in Stablecoin Rules Could Push Canadians Toward U.S. Assets, Experts Say

Experts say delays could make Canadians use US stablecoins more. John Ruffolo, founder of Maverix Private Equity, said, “Every Canadian who transacts in a US stablecoin funds American debt, enriches American institutions and exports our financial data south.”

On September 18, Ron Morrow, Executive Director of Payments, Supervision, and Oversight at the Bank of Canada, spoke at the Chartered Professional Accountants Canada (CPA) conference in Ottawa. He said Canadian savings could quietly move into U.S. assets, like Treasury bills, because U.S. stablecoins are backed by American government debt. If this trend grows, it could lower demand for Canadian bonds and weaken the Bank of Canada’s control over the money supply.

Canadian authorities are aware of these risks and are watching the situation closely. Former deputy governor Carolyn Wilkins also emphasized the need for clear rules, stating Canada requires regulations that ensure “trust, security, stability and competitiveness” in digital payments.

Creating a national framework will be complicated. Canada must coordinate between the federal government, the Office of the Superintendent of Financial Institutions (OSFI), and 13 provincial and territorial securities regulators. This coordination has slowed progress compared with the United States, which has already implemented stablecoin regulations.

Big Crypto Fine Shows Canada Needs Clear Rules

Last week, FINTRAC fined Cryptomus (Xeltox Enterprises Ltd) $126 million. This was for 2,593 anti-money laundering violations. It is the largest fine in Canada’s crypto history. The company did not report suspicious transactions tied to ransomware, Iran, and child abuse, and investigators traced its operations to Uzbekistan and Spain. FINTRAC said the company’s weak systems “significantly impair transparency and accountability.”

FINTRAC has imposed an administrative monetary penalty of $176,960,190 on Xeltox Enterprises Ltd. (also operating as Cryptomus), a money services business incorporated in British Columbia. For more information, consult: https://t.co/JwNhm3DIVs pic.twitter.com/YK1SpyD6HP

— FINTRAC_Canada (@FINTRAC_Canada) October 22, 2025