Bank of Canada wants stablecoins to be backed by high-quality liquid assets

By Promit Mukherjee and David Ljunggren

OTTAWA, Dec 16 (Reuters) - The Bank of Canada says regulations connected aboriginal Canadian stablecoins indispensable guarantee they are backed ​by high-quality liquid assets and beryllium pegged one-to-one to a cardinal slope ‌currency, Governor Tiff Macklem said connected Tuesday.

The Liberal authorities said successful November that it would beryllium introducing regulations ‌next twelvemonth for stablecoins, a signifier of cryptocurrency which are convertible to a fiat currency astatine par.

"We privation stablecoins to beryllium bully money, similar slope notes oregon wealth connected deposit astatine banks," Macklem said.

"A stablecoin indispensable beryllium pegged astatine a one-to-one ratio to ⁠a cardinal slope currency and ‌be backed by high-quality liquid assets truthful that it tin ever beryllium converted to currency astatine par," helium told the Montreal ‍Chamber of Commerce said.

High prime liquid assets are usually government-backed securities specified arsenic treasury bills and authorities bonds.

The conditions for redeeming stablecoins indispensable beryllium afloat disclosed, including the timing and immoderate ​fees that request to beryllium paid, Macklem said.

Ottawa wants to bring Canada's fiscal ‌system up to velocity with galore different precocious and processing economies - including the United States - which are tapping into the imaginable of cryptocurrences.

The authorities volition assistance built spot successful the strategy truthful that fiat-backed stablecoins are harmless and unafraid for consumers and businesses to use, the concern ministry says. The cardinal slope volition beryllium the ⁠regulator for the asset.

"The extremity is to guarantee ​Canadians tin leverage the innovation of stablecoins and ​do truthful safely," said Macklem, making his last nationalist quality of the year.

Macklem said 2026 would spot much innovation successful the fiscal ‍system arsenic Canada modernizes ⁠its fiscal payments system.

This includes mounting up Real-Time Rail, a payments strategy which volition let instant settlements among consumers and businesses successful Canada arsenic good ⁠as crossed borders.

The slope besides intends to enactment connected the implementation of an unfastened banking strategy ‌which volition marque it easier for consumers to comparison and power banks ‌easily, helium said.

((Reuters Ottawa bureau))

Keywords: CANADA CENBANK/