The Bank of Canada says that federal officials in Ottawa should consider the merits of stablecoin regulations.
Speaking at a conference, Ron Morrow, executive director of payments, supervision and oversight at the central bank, said regulations should be developed to help advance payment systems.
“Canada should weigh the merits of federal stablecoin regulation, similar to what other countries have done,” said Morrow in prepared remarks.
Morrow added that the adoption and use of digital assets is growing worldwide, primarily led by the use of stablecoins which are not as volatile as Bitcoin (BTC) and other cryptocurrencies.
Stablecoins, whose value is pegged to the U.S. dollar or price of gold, are also gaining relevance due to the high cost of international money transfers.
“There is a pressing need for faster, cheaper, more transparent and more accessible cross-border payment services. But these services also need to be safe and secure,” said Morrow.
In Canada, regulation of digital assets is split between the provinces and the federal government. Morrow said the provinces and Ottawa should work together on stablecoin regulations.
Critics, including many in the private sector, complain that Canada’s digital payment infrastructure is outdated and behind many other advanced economies.
The current payment infrastructure is controlled by the country’s five big banks that act in concert with one another, an arrangement critics say has led to high fees and delays.
“We’re behind in adopting new technology, fostering new entrants, and providing Canadians with faster and cheaper payment options,” said Morrow.
Bitcoin, the largest cryptocurrency by market capitalization, is currently trading at $116,500 U.S., having gained more than 20% this year.
