In Budget 2025, Canada’s Federal government delivered a series of announcements under the heading “supporting innovation and global competitiveness”.
One of these was the regulation of fiat-backed stablecoins in Canada, in a move that has been broadly welcomed by the financial services ecosystem.
The Department of Finance Canada has stated that its proposed framework “follows recent developments of legislative and regulatory frameworks for stablecoins in other jurisdictions, such as the United States and European Union”.
Role of the central bank
The Bank of Canada will be responsible for administering the framework and for the supervision of stablecoin issuers.
Ron Morrow, executive director of payments, supervision and oversight, Bank of Canada
Ron Morrow, executive director of payments, supervision and oversight at the Bank of Canada, tells Open Banking Expo: “It is very important that Canada has its own regime for stablecoins and the Bank of Canada is well-placed to take on this mandate.
“We are working on the requirements of the stablecoin mandate, set-out in the federal Budget 2025 and in its Budget Implementation Act (Bill C-15), and the implications for our operations. The Bank will leverage its knowledge of payments and tokenization, as well as its supervisory experience with payment service providers to inform the development of this new regime and our approach to supervision.”
Morrow confirms that “a lot of the leg work”, including consultation with industries, will take place in the first half of 2026, ahead of the regulatory development process.
“Once we have regulations and following consultations, we will work as hard as we can to get this regime in place, with launch expected some point in 2027,” he says.
Responding to the Genius Act
All eyes have been on the Genius Act in the US – the Guiding and Establishing National Innovation for US Stablecoins Act – since it was enacted in August last year.
Christian Coppola, vice president strategy and business transformation at Symcor, says: “The US making a big move with the Genius Act really set the stage and forced other markets and jurisdictions to react. It was great to see Canada reacting fairly quickly with at least an initial perspective on the framework for stablecoins.”
Blair Wiley, chief legal officer at Wealthsimple, also welcomes the “urgent and speedy response” from the Canadian government to the US Genius Act.
“I think our government cares more than ever about sovereignty and ensuring that our financial system, [and] our currency remain the dominant means by which Canadians are transacting in Canada,” he adds.
However, Wiley acknowledges there are other factors at play too: “I think that stablecoins present a potential opportunity to introduce more competition and innovation into the Canadian financial ecosystem and, more broadly, this last federal Budget was a very pro-competition, pro-innovation Budget.”
Potential use cases
When asked about the opportunities that could be unlocked by fiat-backed stablecoins in Canada, Morrow explains: “Stablecoins carry the potential to deliver faster, and in some cases, cheaper ways of payment. Money that moves securely and efficiently will also help our financial sector be more productive.”
So, what are the early use cases for Canadian businesses and, potentially, consumers?
Mark Sam, founder and managing director, Major Street Advisory
Mark Sam, founder and managing director of Major Street Advisory, says the biggest use case for stablecoins is cross-border payments. He believes that, generally, B2B transactions are where stablecoins can add most value.
Coppola notes: “On specific use cases, what we’re starting to see is the emergence [of use cases] as it relates to large corporates and wholesale when it comes to cash flow management and cross-border payments.
“Where that seems to be driving some real traction and value in the market today is where it enables real-time liquidity, faster and lower-cost settlements.”
What he believes remains unclear is the benefit of stablecoins to a retail customer: “If you have Interac e-Transfer for customers, and Real-Time Rail and Open Banking, what are we getting that’s net new? That’s been a little less clear. But on the large corporate side, it seems a little clearer there are some benefits.”
For Wealthsimple’s Wiley, how users of a stablecoin can be incentivised for holding and using a stablecoin is also up for debate.
“For stablecoins to be fully adopted, there needs to be a mechanism for a stablecoin issuer, which is earning margin on the deposits they are holding to back the stablecoin, to be able to share that revenue with users of the stablecoin,” he adds.
Creating a dynamic financial ecosystem
“A stablecoin regime creates opportunities to strengthen competition and innovation in the financial sector in Canada,” says Bank of Canada’s Morrow.
“We certainly want Canadians to benefit from new financial products and services – but safely and securely. We want a stablecoin regime that keeps pace with innovation while mitigating risks to our citizens, businesses, economy, and financial system.”
In combination with consumer-driven banking and RTR, stablecoins clearly play a role in a dynamic and vibrant financial ecosystem, in turn, positioning Canada as a competitive and growth economy among its global peers.
For Major Street Advisory’s Sam, the intersection of consumer-driven banking, read/write access and stablecoins is a “trifecta” that he thinks “will be a gamechanger”.
Symcor’s Coppola notes: “With stablecoins – just like any emerging payment vehicle – if it introduces more consumer choice, a better experience, more convenience and with lower cost, that could be a net benefit for the market. But there’s still a lot that needs to be worked through.”
“I firmly believe that the Open Banking framework, the investment in Real-Time Rail, the creation of a platform for stablecoins – all of those things are the key ingredients for driving competition in our financial sector, ultimately, increasing productivity and economic prosperity in Canada,” says Wiley.
“The test now before us is, can we do the things necessary to bring all these things to life? We’ve pointed ourselves in the right direction, but we’re not at the destination yet.”
Further reading: Bank of Canada confirms keynote fireside chat at Open Banking Expo Canada 2026
