Canada rushes to develop stablecoin rules ahead of November 4th budget

Canada’s crypto scene is heating up, and the government is leading the charge.

Ottawa is moving quickly to consider stablecoin regulations, the details of which are expected to be announced in the federal budget on November 4, just days after imposing a record $126 million fine on a cryptocurrency company for anti-money laundering violations.

Here’s what you need to know:

Stablecoin rules are finally coming true

According to Bloomberg, officials have spent the past few weeks in intense consultation with regulators and industry leaders to finalize how stablecoins will be managed in Canada. The discussions are expected to result in clear regulatory proposals when Finance Minister François-Philippe Champagne presents a new budget next week.

Stablecoins are seen as an important bridge between digital assets and mainstream finance. However, the rules were not clear in Canada. Currently, regulators treat stablecoins as securities or derivatives, creating uncertainty for companies and investors.

Meanwhile, the United States has already made significant progress.

The Genius Act, passed in July, gave U.S. regulators the power to oversee stablecoin issuers and set reserve standards. The law treats compliant stablecoins as payment methods, a move largely welcomed by the crypto industry.

Also read: 2025 Canadian Cryptocurrency Regulations

Experts warn of capital flight

Industry leaders are urging Canada to act quickly or risk being left behind. John Ruffolo, founder of Mavericks Private Equity, warned that if the government doesn’t act soon, Canadian investors could move to U.S. stablecoins, hurting demand for Canadian bonds and weakening domestic financial controls.

“Every Canadian who trades in U.S. stablecoins is funding U.S. national debt, enriching U.S. institutions, and exporting U.S. financial data south.” Ruffolo wrote earlier this month.

Even the Bank of Canada and the Office of the Superintendent of Financial Institutions (OSFI) are calling for a national framework to bridge this gap.

Former lieutenant governor Carolyn Wilkins said Canada needs rules that build “trust, security, stability and competitiveness” in payments.

The crackdown sets the tone.

Just last week, Canada’s financial watchdog FINTRAC imposed a record $126 million fine on Kryptoms (Zeltox Enterprises) for 2,593 anti-money laundering violations. This is the largest fine ever imposed in Canada’s crypto sector.

Investigators found the company failed to report suspicious transactions related to child abuse, ransomware and Iran-related money transfers. The operation dates back to Uzbekistan and Spain.

FINTRAC said its systems were vulnerable “It seriously undermines transparency and accountability.” He added that there are still large holes in Canada’s crypto sector that criminals can exploit.

After years of hesitation, Canada appears ready to step up enforcement and draft long-awaited rules.