The federal budget, ‘Canada Strong,’ which includes the institution of policy for stablecoin issuers, passed parliament in Canada, as it seeks independence from the U.S. With the approval of the budget from the parliament, stablecoin issuers will now need to hold reserves to back their stablecoin, among meeting other criteria.
On Monday, the parliament very narrowly passed the first budget introduced by Prime Minister Mark Carney, who is trying to make Canada independent from the United States of America. Among the many other things, the budget also includes regulations for stablecoin issuers.
The ‘Canada Strong’ budget states:
“This legislation will require issuers to maintain and manage adequate asset reserves, establish redemption policies, implement risk management frameworks, and protect the sensitive and personal information of Canadians. The legislation will also include national security safeguards to support the integrity of the framework so that fiat-backed stablecoins are safe and secure for consumers and businesses to use.”
So, how will Canada get independence from the U.S?
Right now, almost 98% of the stablecoin market is USD-denominated (USDT, USDC, PYUSD, USDP, BUSD). This means that Canadians are also using US dollar-backed stablecoins for crypto trading, which indirectly gives power to the US. As such, U.S. regulators indirectly control Canada’s digital-asset flow. However, with this move that Canada made to counteract the U.S. GENIUS Act, it could once again regain its independence. But, how?
By introducing this budget, the country could keep its Canadian financial flows under Canadian jurisdiction, while preventing U.S. stablecoin issuers from dominating Canadian retail & institutional markets. Having their own policy will reduce exposure to U.S. monetary policy or the GENIUS Act. More importantly, it will also avoid surveillance or freeze powers that come with U.S.-regulated digital dollars
