Bank of Canada wants stablecoins to be backed by high-quality liquid assets

Core Viewpoint - The Bank of Canada emphasizes the need for regulations on stablecoins to ensure they are backed by high-quality liquid assets and pegged one-to-one to a central bank currency [1][2]. Regulatory Framework - The Canadian government plans to introduce regulations for stablecoins in the upcoming year, aiming to align with practices in other advanced economies [1][3]. - The conditions for redeeming stablecoins must be fully disclosed, including timing and any applicable fees [3]. Financial System Modernization - The legislation aims to build trust in fiat-backed stablecoins, ensuring they are safe and secure for consumers and businesses [4]. - The central bank will act as the regulator for stablecoins, with the goal of enabling Canadians to safely leverage stablecoin innovations [4]. Future Innovations - By 2026, Canada is expected to see more innovations in its financial system, including the establishment of Real-Time Rail for instant settlements and an open banking system to facilitate easier bank comparisons and switching [4][5].