Bank of Canada calls for national stablecoin regulation

In a speech on September 18, 2025, Ron Morrow, Executive Director of Payments at the Bank of Canada (“BoC”), warned that Canada is falling behind global peers in regulating stablecoins — cryptocurrencies pegged 1:1 to a fiat currency or stable assets such as gold. He urged federal and provincial regulators to “work quickly and collaboratively to evolve our regulatory frameworks.”

Oversight of digital assets in Canada is currently split between provincial securities regulators and the federal Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), which supervises virtual currency exchanges. The BoC is calling for a coordinated federal framework amid growing domestic interest and increasing international momentum, including the U.S.’s recent passage of the GENIUS Act, which sets rules for collateral backing stablecoins and consumer protections.

Stablecoins, used primarily for speculative trading, are entering the mainstream. PayPal, Visa, and Circle Internet Group Inc. are already active, while Canadian firms like Shopify and Tetra Digital Group are following suit.

Mr. Morrow emphasized that “governments are moving to regulate stablecoins and other cryptocurrencies so consumers can reap their benefits and be protected from credit and liquidity risks. In fact, many jurisdictions worldwide either have, or will soon have, a regulatory framework for crypto assets.” He added that Canada should “weigh the merits of federal stablecoin regulation, similar to what other countries have done.”

Beyond stablecoins, Mr. Morrow stated that Canada continues to trail behind other jurisdictions in payments and financial system innovation. The country’s Real-Time Rail payment system has faced years of delays, though industry testing is expected to begin soon. Meanwhile, the 2024 Open Banking Act remains stalled, pending further legislative amendments.

“The pace of change here in Canada has been – to use a kind word – gradual. Other major jurisdictions like the United Kingdom, Australia and the European Union have already embraced changes in many areas,” Mr. Morrow said. “Clearly, there is a need to accelerate change within our own borders.”

The BoC was designated as the regulator for digital payment processing companies last year. According to Mr. Morrow, the BoC now oversees approximately 1,500 payment service providers (“PSPs”), adding that “all PSPs are now expected to comply with their regulatory obligations.”

Conclusion

 Mr. Morrow’s remarks underscored Canada’s need to modernize its regulatory approach to stablecoins in line with global developments. The BoC urges federal and provincial regulators to advance the country’s digital asset and payments frameworks. If you have any questions, contact a member of our Financial Services or Compliance team for assistance.