The Bank of Canada has urged the establishment of a regulatory framework for stablecoins to modernize its payment system and avoid lagging behind other countries. Ron Morrow, the bank's head of payments, emphasized in a recent speech that stablecoins must be as secure and stable as traditional bank deposits to be considered legitimate money. He warned that without proactive regulation, Canada risks being left behind as many jurisdictions worldwide are moving forward with crypto asset regulations. This call for regulation comes during what some call 'stablecoin summer,' a period of increased adoption in stablecoins following positive developments in the U.S. regulatory landscape. Morrow highlighted the global trend towards regulating stablecoins to ensure consumer protection against credit and liquidity risks. The Bank of Canada's recent pivot from developing a central bank digital currency (CBDC) to focusing on real-time payments illustrates the need for a clear regulatory path as discussions around digital currencies remain contentious within the broader financial and crypto communities.

Source 🔗