The Bank of Canada warns: If regulations on stablecoins are not established, traditional banks will be eliminated by the times.

The Bank of Canada warns that if a regulatory framework for stablecoins is not established, it risks falling behind in the global payment innovation; after abandoning the CBDC, the central bank turns to regulating private stablecoins, seeking to find a balance between innovation and risk. (Background: Has the "lying down to earn" era for stablecoin issuers ended with the Federal Reserve's initiation of interest rate cuts?) (Additional context: When stablecoins start to build chains, does Ethereum still have a chance?) At this moment of rapid evolution in global digital currencies, the Bank of Canada issues a rare warning: if a regulatory framework for stablecoins is not established quickly, Canada may be excluded from the new generation of financial networks. This statement came from Ron Morrow, Executive Director of Payments, Supervision, and Regulation at the central bank, during a public speech in Ottawa on the 18th, where he warned policymakers with a saying: "Even if you're on the right track, if you just sit there, you'll get run over." While his tone was plain, it reflected the central bank's urgency regarding the progress of international regulations. Banks should not underestimate the risks of stablecoins. Morrow pointed out that stablecoins can provide a faster and more transparent experience for cross-border payments, but without regulatory guidance, users will be directly exposed to credit and liquidity risks. Currently, Canada's existing consumer protection mechanisms do not cover stablecoins, and he bluntly stated: "Ultimately, for stablecoins to be treated as currency, they must be as safe and stable as bank account balances." This statement highlights that the regulatory gap has become a potential loophole in Canada's financial system. In fact, the Bank of Canada did not initially bet on stablecoins. In 2022, the central bank even collaborated with MIT to research Central Bank Digital Currency (CBDC). However, by September 2024, the central bank officially abandoned its retail CBDC project and redirected resources to modernization projects such as instant payment systems. Official surveys show that 42% of respondents have a positive view of CBDCs, but 20% explicitly stated they "dislike" or "detest" them and are concerned about surveillance risks. Faced with divergent opinions, the central bank chose to take a step back, allowing the private sector to promote stablecoin innovation within a regulatory framework, maintaining financial stability and market vitality through "regulation rather than resistance." Global regulatory competition: Canada cannot afford to lose. Canada's sense of urgency arises from the fact that major economies have already presented their menus. The GENIUS Act passed in the U.S. this summer requires issuers to maintain 1:1 asset reserves, undergo regular audits, and comply with strict AML and KYC regulations; the EU MiCA regulation establishes a licensing and currency association system for stablecoins; the UK has adopted a relatively light model. Although these approaches have their own focuses, they all revolve around the consensus of "same activities, same risks, same regulations." In contrast, Canada's current decentralized supervision, primarily led by provincial agencies, appears insufficient, making the establishment of a nationally consistent federal framework imperative. Challenges and opportunities: the line between innovation and prudence. The market's demand for high-efficiency payment tools is driving the emergence of stablecoins pegged to the Canadian dollar. If regulatory gaps continue, risks will be infinitely amplified; conversely, transparent and clear regulations can provide a safety net for operators and users while attracting fintech innovation. Canada can learn from the U.S. GENIUS Act and the EU MiCA regulation: the former enhances the credibility of stablecoins but increases compliance costs; the latter promotes the spread of euro stablecoins through a clear licensing system. How to balance consumer protection, financial stability, and encouraging innovation will test the wisdom and coordination capabilities of Canadian regulatory authorities. The Bank of Canada's urgent call is both a warning and a watershed moment. After abandoning the CBDC, Canada places its hopes on embracing the possibilities of private stablecoins within a regulatory framework. Whether Canada can collaborate closely with federal and provincial levels and learn from international cases will determine its position in the new round of global payment competition. If stablecoin regulation can maintain its rhythm, Canada can not only avoid marginalization but also have the opportunity to maintain its lead in the digital economy era. Related reports: Will it take until 2027 to be implemented? An in-depth analysis of the capital games behind the "difficult birth" of the Korean won stablecoin. The Bank of England plans to "limit stablecoin holdings," provoking public anger: it simply won't work and will only fall behind in the global crypto competition. Besides stablecoins, what will drive RWA asset values to reach $30 trillion? The article "Bank of Canada Warns: Failure to Keep Up with Stablecoin Regulation Will Lead to Traditional Banks Being Eliminated by the Times" was first published in BlockTempo, the most influential blockchain news media.