Canada proposes regulatory frameworks for stablecoins and open banking

Canada is advancing two major financial regulatory initiatives aimed at modernizing its digital economy. The federal government has released proposed regulations for stablecoins, initiating a 60-day public consultation period. Under the Stablecoin Act, which received Royal Assent in March, the Bank of Canada will oversee stablecoins with interprovincial or international reach. These digital assets, designed to maintain a constant value by being backed by fiat currency, must adhere to strict reserve requirements to ensure liquidity.

Simultaneously, Canada is working toward the implementation of an open banking system, with initial tools expected to be available by the end of 2027. This framework aims to replace ‘screen scraping’—a practice where users share banking credentials with third parties—with a secure method for sharing financial data between consumers, lenders, and service providers. The Ministry of Finance estimates the project will require a $457.7 million investment over ten years, potentially generating $13.2 billion in benefits for consumers and businesses.