Canada is moving closer to a decision on how to regulate stablecoins as policymakers push a broader modernization of the country’s payments system.
The Bank of Canada has urged governments to evaluate formal rules for fiat-referenced crypto tokens as part of a plan to make transactions cheaper and faster while safeguarding consumers and the financial system.
The call comes as the central bank begins supervising payment service providers under a new federal regime and as industry groups prepare for a long-delayed shift to real-time payments.
The backbone of the overhaul is the Retail Payment Activities Act, which created a national framework for nonbank payment firms.
Registration opened on November 1, 2024, and core requirements for risk management and safeguarding of customer funds took effect on September 8, 2025.
Applicants that filed before that date can continue operating while the Bank of Canada completes reviews, a transitional measure intended to avoid disruption for merchants and consumers.
Modernization is also advancing on the infrastructure side, parliament amended the Canadian Payments Act in June 2024 to expand who can join Payments Canada, clearing a path for supervised payment providers and cooperative credit institutions to access national systems alongside big banks.
Payments Canada followed with a public consultation on how to implement those changes.
The central bank has described a move to 24-hour instant transfers as a near-term goal, which would bring Canada in line with peers in the United Kingdom and Australia.
Stablecoins sit at the intersection of these changes, they are increasingly used for trading and cross-border transfers, but Canada does not yet have a unified federal rulebook that sets reserve, audit, or redemption standards specific to stablecoins.
Previous federal consultations examined crypto assets more broadly without landing on detailed requirements for these tokens.
The Bank of Canada has signaled that closing that gap should be part of the payments agenda, arguing that innovation must be matched with clear guardrails.
A federal survey published in September found that as of May 2025, deposit insurance did not cover stablecoins or other crypto assets.
That leaves holders dependent on an issuer’s governance and disclosures, and it raises questions about redemption in a stress event.
Any national regime that formalizes what backs a Canadian stablecoin, how reserves are held, and when holders can convert to cash would address that uncertainty.
The federal banking regulator has already set out how banks must treat exposures to crypto assets for capital and liquidity purposes, aligning with emerging international standards.
Anti-money-laundering obligations have also been updated for financial businesses.
Stablecoin-specific rules would add another layer by targeting token issuers and the mechanics that keep a coin pegged to the Canadian dollar or other currencies.
If Ottawa moves ahead, stablecoin issuers would likely face licensing, reserve segregation, attestation, and redemption duties similar to those in other jurisdictions.
Payment firms that already must register under the Retail Payment Activities Act would gain clearer permissions to handle tokenized value inside a supervised framework, which could reduce compliance uncertainty and support broader access to future real-time rails.
The payoff would be more competition and faster money movement for users, but with clearer recourse if something goes wrong.
The timing will depend on how quickly lawmakers and regulators align a federal approach with provincial securities oversight, which currently governs crypto trading platforms.
