National Bank of Canada recently became the first major Canadian financial institution to support a domestic stablecoin project by investing $10 million in Tetra Digital Group. The Calgary-based trust company will manage custody of the new digital asset, which is planned to be pegged one-to-one with the Canadian dollar and held under domestic regulatory oversight. Deployment of the stablecoin is expected in early 2026, initially for business-to-business payments.

That development has raised broader concerns over digital currency and its potential impact on individual privacy and control. Digital systems enable transactions to be tracked, locations logged, spending categories monitored, and accounts frozen. Programmable features could limit purchases of certain goods or services. Centralized systems may become single points of vulnerability for cyberattacks or misuse by insiders.

Government regulatory trends in Canada suggest a move toward tighter control of cash use. Proposed legislation under Bill C-2 (Strong Borders Act) would ban cash payments, donations or deposits of $10,000 or more by many businesses, charities or professions in single transactions or related ones. Third-party cash deposits would also face restrictions. Anonymous or fictitious accounts would be prohibited. These measures reduce avenues for anonymous or large-volume cash transactions.

Canada still lacks a comprehensive legal framework crafted specifically for stablecoins, so status under securities, banking or payments law remains unclear. Regulatory bodies are working on rules and guardrails. Proposed protections include reserve backing, custody under trust, and transparency in operations.

A stablecoin backed by the Canadian dollar could enhance payments infrastructure and support monetary sovereignty, but risks weigh heavily. Digital currency systems could shift power significantly toward state or institutional overseers, undermining financial privacy, freedom of choice and resilience. Once surveillance mechanisms, freezing powers, spending restrictions or digital profile judgments become normalized, rollback may prove difficult. Without strong legal limits, transparency, oversight and user control, digital currency may pose threats to individual autonomy.