The Bank of Canada has urged for federal regulation of stablecoins to prevent the country from falling behind in payment modernization compared to the U.S. and UK. Deputy Governor Ron Morrow reported that Canada's cross-border payment costs are significantly higher, which could hinder remittances and financial inclusion for immigrant communities. Currently, remittance costs in Canada can reach up to 10%, while stablecoins could lower fees to under 1%. Morrow emphasized that stablecoins must be as secure as traditional bank deposits before scaling, highlighting a need for caution amid their growing adoption. Currently, Canada lacks comprehensive federal regulation for stablecoins, relying on provincial frameworks. Morrow suggested that without innovation in payment systems, Canadian businesses risk losing their competitive edge in the global market, urging the exploration of sandbox models for further development in the stablecoin space.

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