Canada plans to prohibit financial institutions from directly issuing cryptocurrencies, and stablecoins must be issued through independent non-financial subsidiaries

The Canadian government has announced a budget bill that will prohibit federally regulated financial institutions from directly issuing cryptocurrencies and require stablecoins to be issued only through independent non-financial subsidiaries regulated by stablecoin laws.

According to the budget bill announced on November 5 local time, the issued cryptocurrencies must include reserve safeguards such as redeemability at face value and asset segregation, while not being included in public deposit insurance and government guarantee programs. The Bank of Canada will be responsible for the registration of issuers and the supervision and enforcement of regulatory compliance. Meanwhile, the regulatory framework for stablecoins is expected to take effect next fall.