OTTAWA, Sept 18 (Reuters) - The Bank of Canada said on Thursday that Canada should consider the merits of stablecoin regulation and said it wanted the federal and provincial authorities to work together and quickly to help advance payment regulatory frameworks.
"Canada should... weigh the merits of federal stablecoin regulation, similar to what other countries have done," said Ron Morrow, the executive director of payments, supervision and oversight at the BoC.
He was addressing a conference in Ottawa.
Morrow said the use of digital assets was growing, primarily led by the use of stablecoins which are not as volatile as bitcoin and whose values were pegged to a fiat currency such as the U.S. dollar.
Stablecoins are also gaining relevance due to the high cost of international money transfers that people experience in some jurisdictions, he said.
"There is a pressing need for faster, cheaper, more transparent and more accessible cross-border payments services. But these services also need to be safe and secure," he said.
In Canada, regulation of digital assets is split between the provinces and Ottawa.
Since payment infrastructures support the whole financial system and facilitate financial market transactions, federal and provincial regulators "must work quickly and collaboratively to evolve our regulatory frameworks," Morrow said.
Critics, including companies, have often complained that Canada's digital payment infrastructure is archaic when compared with some advanced countries, such as the UK and Australia, and lags even many developing countries.
This infrastructure is primarily controlled by the country's biggest five banks, an arrangement that critics say has led to high fees and delays and throttles competition.
"We're behind in adopting new technology, fostering new entrants and providing Canadians with faster and cheaper payment options," Morrow said, but added that lately there has been some momentum from the private and public sector.
Reporting by Promit Mukherjee; Editing by David Ljunggren and Daniel Wallis
