Canada may soon find itself playing catch-up in the rapidly evolving stablecoin market, as regulatory frameworks elsewhere outpace its own. As of May 2025, Canadian crypto industry insiders are expressing concerns that the country’s cautious approach to stablecoin regulation is putting it at a competitive disadvantage. The Canadian Securities Administrators (CSA) classified stablecoins as “securities and/or derivatives” back in December 2022, a move that critics argue has stymied local innovation while other jurisdictions forge ahead.
Regulatory Hurdles and Industry Frustration
The CSA’s decision came in the aftermath of the FTX collapse and the Terra stablecoin debacle, events that sent shockwaves through the global crypto market. Yet, the fallout from these incidents seems to have led Canada down a path of regulatory caution that some industry experts believe is overly restrictive. Morva Rohani, managing director of the Canadian Web3 Council, pointed out the “patchwork” nature of the current regulatory regime, noting that it introduces significant operational uncertainty.
Others in the industry also feel that Canada is out of step with the global trend. Tanim Rasul, COO of Canadian crypto exchange NDAX, has been vocal about his belief that the CSA’s approach misses the mark. At a recent Blockchain Futurist Conference in Toronto, Rasul highlighted the European Union’s MiCA law as a more fitting blueprint for stablecoin regulation, arguing that such frameworks recognize stablecoins as payment instruments—an aspect he believes is crucial for fostering growth. This sentiment echoes recent developments in the U.S., where the U.S. Senate Moves Toward Action on Stablecoin Bill, signaling a more proactive regulatory stance.
Potential Economic Implications
The repercussions for Canada’s economy could be significant. Some experts warn that without a robust framework to support CAD-denominated stablecoins, the use of the loonie could diminish as consumers and businesses gravitate towards USD-pegged alternatives. Som Seif, founder of Purpose Financial, has voiced concerns over this potential erosion of the Canadian dollar’s relevance on the global stage, suggesting that a lack of regulatory innovation could see Canada fall behind in the digital currency revolution.
Stablecoins are particularly well-suited for peer-to-peer (P2P) payments, a niche that remains underdeveloped in Canada. Coinbase Canada CEO Lucas Matheson emphasized the need for stablecoin solutions, lamenting the current reliance on cumbersome and costly wire transfers. While services like Interac e-Transfer provide some domestic P2P capabilities, the lack of integration with mainstream financial services remains a hurdle. Meanwhile, global companies like Visa are making strides with initiatives such as Visa and Baanx Launch USDC Stablecoin Payment Cards, highlighting the potential for stablecoins in everyday transactions.
A Glimmer of Hope?
Looking towards the future, there is cautious optimism that Canadian policymakers might shift their stance. The recent federal election victory by the Liberals could bring about a more pragmatic approach to crypto regulation. Prime Minister Mark Carney has previously acknowledged the potential role of stablecoins in payment systems, albeit with strong regulatory frameworks in place.
Kohani of the Canadian Web3 Council speculates that with Carney at the helm, Canada might adopt a “regulation-first” approach but with an eye towards modernization. This could include crafting a stablecoin framework that aligns with global standards and secures the relevance of the Canadian dollar.
However, whether these changes will materialize remains an open question. The global stablecoin market is expanding, with countries like the U.S., EU, Singapore, and the UAE leading the charge. As Canada deliberates its next steps, the clock is ticking, and the crypto world waits to see if it can carve out its place in this digital frontier.
Source
This article is based on: Canada lags with stablecoin approach, but there’s room to catch up
Further Reading
Deepen your understanding with these related articles:
- Tether’s U.S.-Focused Stablecoin Could Launch Later This Year, CEO Paolo Ardoino Says
- SEC Ditches PayPal’s PYUSD Probe, Removing Key Regulatory Hurdle for Its Stablecoin
- UK’s FCA Seeks Public and Industry Views on Crypto Regulation
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
