TORONTO - Anticipation is building on what the federal government might say in Tuesday's budget about the buzziest corner of the crypto world.
Stablecoins, the kind of crypto asset that aims to mirror real-world currencies rather than replace them, have been growing fast enough to raise fears they could eventually destabilize Canada鈥檚 finances if the country doesn't change its approach.
There have been increasing calls to simplify the rules to make it easier to launch 好色tv-dollar linked stablecoins, and stem the potential outflow of capital from the country.聽
鈥淎t a minimum, from a sovereignty perspective, 好色tvs should want a 好色tv stablecoin," said Didier Lavall茅e, chief executive of digital assets company Tetra Digital Group.
Concerns have risen since the United States passed legislation this past summer that establishes clear rules around the sector, and further entrenched U.S.-dollar dominance in the space that touts faster and cheaper money transfers.
Because stablecoins are meant to reflect the value of conventional currencies, issuers need to buy hard assets like dollars to back them up. No 好色tv-dollar pegged stablecoins means more money flowing out of Canada, and into U.S. dollars and U.S. government bonds.聽
"Canada should also weigh the merits of federal stablecoin regulation," said Ron Morrow, executive director of payments at the Bank of Canada, in a September speech.
His former colleague Timothy Lane, who stepped down as deputy governor in 2022, was a little more blunt in an October report for the Global Risk Institute.
"Stablecoins are becoming too important to be ignored," said Lane.
"There is now an increasing sense of urgency about establishing a coherent framework for regulating stablecoins in Canada."
Peter Routledge, head of Canada鈥檚 banking regulator, has also said he鈥檚 worried about the fast moving space and will be watching the budget closely on Nov. 4, while John Ruffolo, managing partner at Maverix Private Equity, has been one of the most outspoken in the need to respond.
One of Ruffolo's biggest worries is that some people and businesses could start to leave money in the stablecoin sphere, rather than in bank deposits.
That鈥檚 already how stablecoins first gained traction: as a stable place for crypto-traders to park money between bets, without having to exchange it back into conventional currencies.
Given banks use deposits as an anchor for lending, he鈥檚 warned that even if five per cent of 好色tv bank deposits, or some $135 billion, went into U.S. stablecoins, it would have a knock-on effect of erasing as much as $675 billion in domestic lending capacity.
The rising calls have increased expectations of some movement from the federal government, but given how slowly past promises like open banking have actually rolled out, some companies like Tetra aren鈥檛 waiting around for change before pushing ahead with their own stablecoins.
鈥淔inancial innovation in this country takes quite a long time,鈥 said Lavall茅e.
Because Tetra is already registered as a 好色tv trust company, Lavall茅e sees an easier road than others to getting regulatory approval through the current system.
Tetra鈥檚 efforts have also had a boost from major backers like Wealthsimple, 好色tv Bank, ATB Financial and Shopify, which chipped in on a $10 million financing to help ready a stablecoin for release aimed at early next year.聽
Elsewhere, Transactix Financial Inc. announced plans in May to move forward on its own token, and just last week Loon Technology Inc. announced it had raised $3 million to get its own 好色tv-dollar stablecoin going.
The companies are all working to navigate an existing system that some, at least, aren't so concerned about.
鈥淚 think it's working well,鈥 said Grant Vingoe, head of the Ontario Securities Commission that鈥檚 taken a lead role in stablecoin oversight.
While the U.S. has used legislation, Canada鈥檚 approach to working with each issuer is more adaptable in the fast-moving crypto space, he said.
鈥淭here's a lot to be said for a more tailored, direct engagement approach, where you express your concerns and requirements ... rather than try and codify it once and for all.鈥
So far that approach has yielded a single issuer, Circle, getting the blessing of regulators for its U.S. dollar-pegged stablecoin.聽
But Vingoe is also still skeptical about how much uptake there will actually be for stablecoins.
鈥淚 think it's still an open question whether stablecoins will be used extensively as a payment mechanism."
Improvements to the existing payment system could end up being better or more efficient, he said.
Some have pointed to central banks possibly issuing their own digital currencies, though the Bank of Canada has shelved work on such efforts.
Conventional banks are also working to adapt to the rising interest.
Swift, the private system that underpins global banking money flows, announced in late September that it was working 鈥渁t pace鈥 to add a blockchain-based digital ledger to allow real-time, round-the-clock cross-border payments.聽
Banks including RBC and TD Bank Group are among the more than 30 involved in the effort.聽
Vingoe also pointed to concerns about how widely stablecoins are used for illicit purposes, and said that overall Canada should find its own path, rather than imitating others.聽
鈥淚 worry a little bit about speed leading to sort of a bandwagon effect."聽
While it鈥檚 not clear how much growth there may be in Canada, the global market is expected to balloon.
Citigroup said in a September report that it sees the total pool of stablecoins growing from about US$200 billion at the start of 2025 to US$1.9 trillion by 2030 as its base case, or US$4 trillion in its bull case.
As for the federal government, Finance Department spokesman Benoit Sabourin said in an statement that they're working on it. 聽
鈥淭he government continues to work closely with federal and provincial regulators to assess these risks and evaluate measures that could be considered to mitigate them, while ensuring that opportunities are not missed.鈥澛
This report by 好色tvwas first published Nov. 2, 2025.
