Bank of Canada urges stablecoin rules to keep pace with global payments shift

The Bank of Canada is sounding the alarm over fears the country will fall behind in modernizing its payment ￰0￱ say Canada needs to quickly implement a regulatory framework for stablecoins, digital tokens linked to traditional money like the Canadian ￰1￱ Morrow, the central bank’s executive director of payments supervision and oversight, said at a conference in Ottawa this week that Canada may have to look at regulating stablecoins ￰2￱ said Momentum is building not just across the United States but ￰3￱ that if Canada were on track and weren’t taking action, it might not ￰4￱ appeal comes as digital payments grow worldwide and stablecoins are becoming inexpensive, swift, and efficient for daily ￰5￱ emphasized that for stablecoins to work as actual money, they had better be just as safe and stable as the balance in a bank ￰6￱ urged to lead the way The Bank noted that major economies are moving ahead with digital ￰7￱ ￰8￱ passed the GENIUS Act to regulate stablecoin issuers , while the EU is preparing to roll out its Markets in Crypto-Assets (MiCA) ￰9￱ focus on transparency, robust reserves, and consumer protection.

It’s now up to Canadian regulators to follow suit, he and other advocates ￰10￱ Office of the Superintendent of Financial Institutions (OSFI ) also subsequently recognized that a regulatory framework for stablecoins that includes licensing, redemption rights, and reserves from issuers is in the ￰11￱ also announced that it was prepared to experiment with digital assets as long as they can be easily ￰12￱ watchers fear that a patchwork, with provinces adopting different rules, would stunt ￰13￱ there are calls for federal and provincial regulators to collaborate on a single set of ￰14￱ are having a moment, courtesy of something within the industry known as “stablecoin summer.” Cross-border transfers, e-commerce, and instant peer-to-peer payments are some of the causes for their surge in ￰15￱ benefit from lower costs and faster speeds than traditional banking rails.

However, the Bank of Canada has also raised a ￰16￱ not unlimited, the cost of a stablecoin could be attacked by liquidity-induced crises, credit risks, and ruleless poor ￰17￱ warned that Canadians must be well protected lest stablecoins succumb to the pressure and implode, through the experience of other failed crypto projects across the ￰18￱ redirects digital currency strategy toward stablecoin regulation The fight over stablecoins is coming as Canada has internally reconsidered its decision to introduce its central bank digital currency (CBDC). The Bank of Canada researched CBDC with the Massachusetts Institute of Technology (MIT) in ￰19￱ the bank said in September 2024 that it was taking a break from its work on the project, citing other priorities, such as an effort to upgrade the country’s real-time payments ￰20￱ to surveys, while 42% of Canadians have a positive attitude toward CBDCs, one in five said they either disliked or hated the ￰21￱ people in crypto are skeptical about CBDCs because they fear governments can and will deploy them to surveil their citizens and eliminate financial ￰22￱ central bank has set sights on other private digital assets, such as ￰23￱ say doing so could bring many benefits of digital money without provoking the same public ￰24￱ Canada is scheduled to release a draft of the stablecoin law in ￰25￱ would encompass OSFI, federal politicians, and provincial ￰26￱ it becomes the industry standard, compliance would guide issuers, create rules protecting consumers, and explain how reserves must be held.

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