Bank of Canada Governor Tiff Macklem has declared the central bank's intention to transform stablecoins into "good money" that is as reliable and trusted as traditional bank deposits and notes. This move positions the Bank of Canada at the forefront of regulating the digital currency landscape within the country.
Regulatory Framework Set for 2025
In a year-end speech delivered to the Chamber of Commerce of Metropolitan Montreal, Macklem detailed the forthcoming regulatory approach. He confirmed that the proposed Stablecoins Act, first mentioned in the federal budget last month, will establish rules for stablecoin issuers. Furthermore, existing retail payments legislation will be amended to encompass transactions made with stablecoins.
The central bank will collaborate closely with Finance Canada throughout 2025 to draft these crucial regulations. The overarching goal, as stated by Macklem, is to enable Canadians to safely harness the innovative potential of stablecoins without exposure to undue risk or fraud.
Aligning with Global Trends and Expanding Mandate
Macklem noted that Canada is following a path similar to other jurisdictions, including the United States, which passed the U.S. Genius Act. These regions are seeking to capture the economic benefits of cryptocurrencies while proactively mitigating their inherent risks. The Bank of Canada's role is expanding significantly in this new financial era.
The institution is now taking on broader responsibilities, including overseeing the retail payments system, advocating for consumer-driven banking, and modernizing the national payments infrastructure. "With our role as the provider of cash and the supervisor of payment systems, and our mandate to control inflation, these new responsibilities make the bank a one-stop shop for money you can trust," Macklem asserted.
Economic Headwinds and Future Mandate Review
Looking ahead to the coming year, the Governor highlighted that structural economic changes, such as global trade disruptions and the rise of artificial intelligence, could create inflationary pressures. He specifically pointed to protectionist U.S. trade policies and high tariffs as sources of added cost and economic volatility.
Macklem also touched on the Bank's upcoming mandate renewal in 2026, a process that occurs every five years in consultation with the federal government. The review will focus on ensuring the bank's flexible inflation-targeting framework remains effective in a world increasingly prone to economic shocks. The aim is to provide Canadians with clear information on how the Bank is working to maintain low and stable inflation.
