- Canada shifts from CBDC to stablecoins for financial oversight.
- Bank of Canada enhances consumer data sharing framework.
- Focus on market-led digital transactions, reducing fintech uncertainty.
Canada, through Budget 2025 and the Budget Implementation Act, has appointed the Bank of Canada as the national supervisor for open banking and stablecoin oversight.
This realignment highlights Canada’s commitment to a North American digital finance model, impacting fintech innovation and regulation while avoiding a China-centric approach.
Nutgraph:
Canada has stepped up its efforts in the digital financial sector with the enactment of Budget 2025 and the Budget Implementation Act (Bill C-15). The Bank of Canada will now oversee open banking and stablecoin regulation. Through this move, Tetra Digital is at the forefront, receiving a $10 million investment from Shopify, Wealthsimple, and the Bank of Canada to develop a CAD-denominated stablecoin. This project underscores a significant shift from a CBDC focus. Tiff Macklem, Governor of the Bank of Canada, noted there was “no compelling reason to advance the project” regarding CBDC abandonment in September 2024.
Sections
Canada’s Financial Technology Framework
Regulation and Competition
The immediate effects of these changes are predominantly felt by the financial technology sector, which anticipates greater competition. Financial institutions including payment service providers, are keen to align their strategies with the new framework. Regulatory oversight from the Bank of Canada on stablecoins and open banking is expected to enhance data access and security, promising a boost in fintech activities. However, it may also increase compliance costs for the industry.
Market-Led Stablecoins
Historically, Canada has progressed from the early concept of a CBDC to prioritizing market-led stablecoin solutions. This shift marks a clear preference for private sector engagement over centralized digital currency initiatives. Potential outcomes of this regulatory framework include elevated standards for payments innovation and integration with real-time systems. With the phased launch anticipated between 2026 and 2027, Canada seeks to fortify its digital finance landscape.
