By Promit Mukherjee and David Ljunggren<\/p>\n
OTTAWA, Dec 16 (Reuters) – The Bank of Canada says regulations on future Canadian stablecoins must ensure they are backed \u200bby high-quality liquid assets and be pegged one-to-one to a central bank \u200ccurrency, Governor Tiff Macklem said on Tuesday.<\/p>\n
The Liberal government said in November that it would be introducing regulations \u200cnext year for stablecoins, a form of cryptocurrency which are convertible to a fiat currency at par.<\/p>\n
“We want stablecoins to be good money, like bank notes or money on deposit at banks,” Macklem said.<\/p>\n
“A stablecoin must be pegged at a one-to-one ratio to \u2060a central bank currency and \u200cbe backed by high-quality liquid assets so that it can always be converted to cash at par,” he told the Montreal \u200dChamber of Commerce said.<\/p>\n
High quality liquid assets are usually government-backed securities such as treasury bills and government bonds.<\/p>\n
The conditions for redeeming stablecoins must be fully disclosed, including the timing and any \u200bfees that need to be paid, Macklem said.<\/p>\n
Ottawa wants to bring Canada’s financial \u200csystem up to speed with many other advanced and developing economies – including the United States – which are tapping into the potential of cryptocurrences.<\/p>\n
The legislation will help built trust in the system so that fiat-backed stablecoins are safe and secure for consumers and businesses to use, the finance ministry says. The central bank will be the \u2060regulator for the asset.<\/p>\n
“The goal is to ensure \u200bCanadians can leverage the innovation of stablecoins and \u200bdo so safely,” said Macklem, making his final public appearance of the year.<\/p>\n
Macklem said 2026 would see more innovation in the financial \u200dsystem as Canada modernizes \u2060its financial payments system.<\/p>\n
This includes setting up Real-Time Rail, a payments system which will allow instant settlements among consumers and businesses in Canada as well \u2060as across borders.<\/p>\n
The bank also intends to work on the implementation of an open banking system \u200cwhich will make it easier for consumers to compare and switch banks \u200ceasily, he said.<\/p>\n
((Reuters Ottawa bureau))<\/p>\n
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