Bank of Canada wants to make stablecoins ‘good money,’ Macklem says

Bank of Canada governor Tiff Macklem Photo by Peter J. Thompson/National Post

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Bank of Canada governor Tiff Macklem said he wants to make stablecoins “good money” like bank deposits and notes, as the central bank is set to take the helm on regulating the digital currency.

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“The proposed Stablecoins Act will regulate stablecoin issuers, and the retail payments legislation will be amended so that it also applies to stablecoin payments,” he said, during an end-of-year speech in front of the Chamber of Commerce of Metropolitan Montreal. “The goal is to ensure Canadians can leverage the innovation of stablecoins and do so safely.”

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The act was mentioned in the federal budget last month and the central bank intends to work closely with Finance Canada to support the drafting of regulations next year. The United States was the first to create a legislative framework for stablecoins under the U.S. Genius Act, and Macklem said other jurisdictions are looking to bring the benefits of cryptocurrencies to their own economies, without the risk of fraud or instability.

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Macklem also touched on the growing responsibilities the central bank has taken on to ensure the regulation of new forms of banking and payments, including overseeing the retail payments system, pushing for consumer-driven banking and modernizing Canada’s national payments infrastructure.

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“With our role as the provider of cash and the supervisor of payment systems, and our mandate to control inflation, these new responsibilities make the bank a one-stop shop for money you can trust,” said the governor.

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Looking to next year, Macklem said the reconfiguration of trade and the restructuring of Canada’s economy will continue to dominate. He added that ongoing structural changes, like global trade disruptions and the rise of artificial intelligence, have the potential to add inflationary pressures.

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“Protectionist U.S. trade policy and high tariffs are adding costs and creating economic volatility,” said Macklem, during an end-of-year speech. “More generally, ongoing structural changes are turning into headwinds that have the potential to disrupt supply and add inflationary pressures.”

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Macklem also discussed the central bank’s plans for its mandate renewal in 2026. Every five years, the Bank of Canada and the federal government renew the central bank’s monetary policy framework.

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“We want to be sure the way we use our flexible inflation-targeting framework gives us the best chance of keeping inflation low and stable in a more shock-prone world,” said Macklem. “We want to provide the best information to Canadians about how we’re doing that.”

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