Bitcoin experienced a sharp decline this week, dropping below $86,000 on November 21, 2025, and closing near $82,605 by November 23, amid a broader cryptocurrency sell-off triggered by the reversal of the yen carry trade. The Japanese yen weakened to a 10-month low near 158 JPY per USD earlier in the week, following Japan’s $135.4 billion stimulus package announced on November 21, which spiked 30-year bond yields to 3.41% and heightened concerns over the country’s 230% GDP debt burden. The cryptocurrency, often a target for traders in the yen carry trade—borrowing cheap yen to invest in higher-yield assets like Bitcoin—faced downward pressure from forced deleveraging, margin calls, and capital repatriation as rising yields eroded trade profitability and markets priced a 51% chance of a Bank of Japan rate hike in December, according to market analysts.
In contrast, Canada’s approach to cryptocurrency regulation advanced significantly with the tabling of the 2025 federal budget (“Canada Strong”) on November 4, 2025, and its subsequent approval by Parliament around November 18, 2025. The budget proposes new legislation, set for introduction via the Budget Implementation Act, to regulate fiat-backed stablecoins—digital currencies pegged to assets such as the Canadian dollar. Under the proposed framework, stablecoin issuers will be required to maintain 1:1 reserves in high-quality liquid assets, establish clear redemption policies for immediate or face-value exchanges, and adopt comprehensive risk management frameworks, including cybersecurity, governance, data protection, and contingency planning. The Bank of Canada will administer and oversee the regime for non-prudentially regulated issuers, maintaining a public registry and conducting national security reviews; it will retain $10 million over 2026–27 from remittances for initial setup, with approximately $5 million in annual ongoing costs offset by fees from regulated issuers.
The Canadian framework, while drawing inspiration from the U.S. GENIUS Act (passed in July 2025 and effective 2027), has been customized to the domestic market, emphasizing CAD-pegged stablecoins to reduce reliance on USD tokens. Rather than prohibiting unlicensed issuance outright, Canada adopts a more inclusive strategy: Any qualified entity can apply to become an approved stablecoin issuer by adhering to the stipulated procedures, such as disclosing reserves and risks, as outlined in the budget and forthcoming legislation.
This development marks a pivotal moment for the Canadian stablecoin market, potentially fostering innovation and broader adoption of cryptocurrency technologies across the nation, from Vancouver to St. John’s.