Bank Of Canada: Create Our Version Of The GENIUS Act, Or Risk Getting “Run Over

The Bank of Canada is calling for fast stablecoin regulation. The bank is warning that Canada risks falling behind global peers if change doesn’t happen soon.

The Bank of Canada has urged federal and provincial regulators to introduce something similar to the US’s GENIUS Act for stablecoin regulation. 

Ron Morrow, the central bank’s executive director of payments and oversight, said Canada risks being left behind if it fails to act.

He argued that for stablecoins to be widely accepted, they must be as reliable as bank deposits. 

Stablecoins at the Centre of Global Change

Stablecoins are gaining traction globally as a cheap and fast alternative for payments. Unlike Bitcoin or Ethereum, stablecoins are pegged to traditional currencies like the U.S. dollar, which makes them less volatile. 

Their popularity has been rising as cross-border transactions continue to be expensive and slow in many regions.

Morrow pointed out that stablecoins can address these issues, but warned that proper safeguards are also important. 

He said there is strong demand for payment solutions that are faster, more transparent and more accessible. However, these systems must also be safe and reliable if they are to replace existing banking models.

Canada risks falling behind other nations.

Many countries, including the United States, the UK, and Australia, have already advanced their frameworks for digital assets. Canada, however, continues to lag. 

Critics argue that its payment system is controlled by a handful of large banks, which has led to high fees and slow transfers.

Morrow admitted that Canada has been slow in adopting new technologies but said that recent efforts by both government and private sector players are showing some progress. Still, he urged authorities to act quickly and work to avoid losing ground to international competitors.

Abandoned CBDC project and current priorities

In 2022, the Bank of Canada worked with the Massachusetts Institute of Technology to look into a central bank digital currency (CBDC). That project was later shelved in September of last year so the bank could focus on other priorities, including building a real-time payment system.

A survey conducted during the project showed mixed views among Canadians. 

About 42% of respondents saw CBDCs positively, while 20% said they disliked or even hated the idea. Many in the crypto community continue to be sceptical of CBDCs, with many more seeing them as tools for government control, rather than financial innovation.

Stablecoin regulation seen as urgent step

Morrow said the split responsibility between federal and provincial authorities makes regulation more complex in Canada. 

Still, he insisted that both sides must work together. He added that modern payment infrastructures support the entire financial system, which makes quick progress important.

Canada faces pressure to modernise

The Bank of Canada’s message is clear. If it doesn’t take fast action on stablecoin regulation, Canada risks being sidelined as other countries push towards modern digital finance. 

Stablecoins are already playing a major part in remittances, global trade and online transactions. 

This said, unless Canada builds a secure and transparent framework, consumers and businesses may be forced to rely on foreign systems instead.

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