Canada to expand stablecoin regulation, requiring banks to issue through non-financial subsidiaries

On November 10, the Canadian government’s published 2026 Federal Budget outlined plans to further refine its stablecoin regulatory framework, requiring federally regulated financial institutions to issue stablecoins through non-financial institution subsidiaries supervised under the Stablecoin Act, and bringing foreign financial institutions not subject to Canadian prudential regulation into the scope of the relevant law.

The budget also proposes that the government will continue to study consumer protection measures in the event of bankruptcy by stablecoin issuers or custodians, to enhance market transparency and regulatory consistency.

In addition, Canada plans to advance the modernization of its payment system and introduce related legislation to combat illegal cryptocurrency ATMs and financial crime. The aforementioned stablecoin measures belong to the follow-up regulatory arrangements proposed in the budget and still require further implementation.