Canada’s Central Bank Calls for Strong Reserve Backing for Stablecoins

Bank of Canada Governor Tiff Macklem emphasized the need for robust reserve backing and regulatory safeguards for stablecoins in a speech on December 16, 2025, as the country prepares to implement a new federal framework in 2026.

Delivering remarks to the Chamber of Commerce of Metropolitan Montreal, Macklem stated that stablecoins must be pegged one-to-one to a central bank currency—such as the Canadian or U.S. dollar—and backed exclusively by high-quality liquid assets, like Treasury bills and government bonds. These measures ensure tokens can always be redeemed at par, functioning as “good money” comparable to banknotes or insured deposits.

The governor stressed full transparency on redemption terms, including timing and fees, alongside operational resilience to prevent runs or de-pegging events. Insufficient reserves, he warned, could undermine trust and pose systemic risks amid growing stablecoin use in payments.

Macklem’s comments align with the federal government’s 2025 budget, which introduced the proposed Stablecoins Act. The legislation requires issuers to maintain adequate reserves, implement risk management protocols, and protect user data, with the Bank of Canada overseeing compliance. Regulations are slated for finalization next year, building on global models like the U.S. GENIUS Act.

While stablecoins promise innovation in faster, cheaper transactions—particularly cross-border—Macklem underscored balancing benefits with consumer protection and financial stability. The framework aims to foster safe adoption without a central bank digital currency.

Analysts view the standards as a cautious yet progressive step, positioning Canada to integrate digital assets securely while mitigating volatility and illicit finance risks in an expanding market.