“Even if you’re on the right track, you’ll get crushed if you stay there.” This statement by Ron Morrow, Executive Director of Payments, Supervision and Supervision at the Bank of Canada, sounds like a warning to Canada. Indeed, while the country has abandoned its CBDC projects, stablecoins are experiencing a real boom. In this context, the Bank of Canada is calling for the establishment of a regulatory framework for these stablecoins.
A regulatory framework for stablecoins
At a conference, Ron Morrow highlighted the urgency for Canada to modernize its payment system. According to him, stablecoins could play a key role in this modernization. However, for them to be considered money, they must be as safe and stable as the balance in a bank account.
“At the end of the day, for stablecoins to be considered money, they must be as safe and stable as your bank account balance (…) Governments are working to regulate stablecoins and other cryptocurrencies so that consumers can reap the benefits and be protected from credit and liquidity risks. In fact, many jurisdictions around the world already have, or will soon have, a regulatory framework for crypto-assets. »
Morrow also mentioned that many countries have already implemented or are in the process of developing regulations for cryptocurrencies. He urged Canadian federal and provincial regulators to do the same so as not to fall behind.
The Abandonment of the Canadian CBDC
In 2022, the Bank of Canada collaborated with MIT to develop a central bank digital currency (CBDC). However, in September 2024, the bank decided to abandon this project. Instead, it focused on other priorities, such as developing a real-time payment system.
This decision came after a survey of Canadians on their perception of a CBDC. The results showed that only 42% of respondents were in favour of a CBDC, while 20% were opposed to the idea.
Ron Morrow’s speech reflects a growing awareness of the importance of stablecoins in the modern financial system. While Canada has shelved its CBDC project, it now seems ready to embrace stablecoins, provided a strong regulatory framework is in place.