Canada’s fintech regulatory landscape continues to evolve, with significant new developments affecting stablecoins, consumer-driven banking and payment infrastructure. Recent legislative and regulatory changes underscore a clear policy direction toward greater oversight, consumer protection and system stability, while preserving space for innovation and competition.
In our latest Fintech in Canada quarterly update, we examine key milestones and emerging compliance considerations, including:
- how issuers can move on compliance readiness in light of newly released details about the federal stablecoin framework, including new registration, reserve, governance and risk management requirements;
- the transition of open banking from concept to regulated framework with the enactment of the Consumer-Driven Banking Act;
- strategic and operational implications of a recent expansion of Payments Canada membership to include RPAA registered payment service providers; and
- compliance risks related to the inaugural reporting cycle for PSPs under the Retail Payment Activities Act.
Canada’s Stablecoin Framework
Further to our recent commentary in Fintech in Canada Q3 2025, the federal government has released details of Canada’s new stablecoin framework and the enabling legislation has now received royal assent with the passage of the Budget Implementation Act, formally establishing a comprehensive regime overseen by the Bank of Canada for regulating fiat‑backed stablecoins. The fundamental legislative approach of Canada's federal stablecoin regulation is to treat qualifying stablecoins as a regulated payment instrument rather than a security. It will apply to both Canadian and foreign issuers making stablecoins available in Canada, and, as we have noted in our previous commentary, is intended to align Canada with similar regimes including those of the United States, the United Kingdom and the European Union. This approach is intended to encourage innovation and competition while providing regulatory certainty and strengthening consumer protection and financial stability.
Under the federal regulatory framework, stablecoin issuers will be required to:
- register with the Bank of Canada;
- maintain 1:1 reserves;
- offer par‑value redemption; and
- meet prescribed governance, risk management, cybersecurity and disclosure standards.
Reserves must be properly segregated and safeguarded, including being held with qualified custodians. Additional regulations may be imposed if national security and systemic risk concerns are identified as part of the application process. Certain arrangements—such as closed‑loop stablecoins and stablecoins issued by federally regulated financial institutions—are excluded, although detailed guidance on these arrangements has not yet been provided.
While more detailed regulations are still forthcoming, market participants can work towards compliance readiness today, particularly around reserve management, custody arrangements and operational governance.
Open Banking in Canada: Consumer-Driven Banking Moves to Implementation
As we noted in Fintech in Canada Q3 2025, Budget 2025 gave long-awaited momentum to consumer-driven banking—also known as "open banking"—in Canada by proposing legislation to complete the Consumer-Driven Banking Act (CDBA). Consumer-driven banking, as we described our original blog post on the topic, will enable consumers and small businesses to securely transfer their financial data to approved service providers of their choice, replacing less secure practices such as screen scraping, which is prohibited by the CDBA.
That momentum has now become law. On March 26, 2026, Bill C-15, the Budget Implementation Act, 2025, No. 1, received Royal Assent, repealing the earlier CDBA and enacting a new CDBA, among other measures. The new CDBA addresses accreditation, consent, authentication, liability, complaints, security safeguards, national security, administration and enforcement, and screen scraping, among other things.
The Bank of Canada will play a central role under the CDBA by:
- accrediting participating entities;
- maintaining a public registry;
- supervising compliance;
- monitoring market and consumer issues; and
- supporting participation in the regime and fostering competition in the financial sector in the interests of consumers.
Fintechs should be aware that participation in the consumer‑driven banking framework is not a given. To play in the Canadian open banking space, fintechs will have to apply to the Bank of Canada, demonstrate compliance with applicable technical standards and security safeguards, and pay a prescribed accreditation fee. Fintechs already accredited under the Retail Payment Activities Act (RPAA) may apply for accreditation under the CDBA through a distinct statutory pathway, which will also be administered and enforced by the Bank of Canada. As part of the application process, applicants must explain how they safeguard end-user funds, outline any risk management and incident response processes in place or planned, and disclose any registrations for retail payment activities with FINTRAC or under any other federal, provincial or territorial act.
Despite the passage of the CDBA into law, further regulatory developments remain to come before the Canadian open banking framework becomes fully fleshed out. Even so, the question for fintechs is no longer whether Canada will implement consumer‑driven banking, but how quickly the fulsome requirements of the CDBA will come into effect, and how prepared and able fintechs are to meet the financial, regulatory and technical requirements to operate within the resulting regime.
Payments Canada Membership Expands to Include RPAA-registered PSPs
Following amendments to the Canadian Payments Act that came into force in September 2025, Payments Canada admitted its first RPAA-registered Payment Service Providers (PSPs) as direct members: Wise, Float, KOHO, Paramount Commerce and Brim Financial. For PSPs, membership in Payments Canada not only opens up strategic opportunities that flow from direct access to national clearing and settlement infrastructure—including the forthcoming Real-Time Rail (RTR)—but also increases compliance, oversight and operational readiness expectations from Payments Canada.
First Annual Reporting Obligations for PSPs
For PSPs registered under the RPAA, the first annual reports to the Bank of Canada were due March 31, 2026. The form of report is available through the Bank's PSP Connect portal and covers a range of areas including operational risk management, safeguarding of end-user funds, as well as incident, transaction volume and financial information. The Bank has published a step-by-step guide to assist with completion. Failure to file may result in penalties under the RPAA.
Bennett Jones Fintech Team
Bennett Jones' Fintech team helps clients navigate the evolving digital economy and regulatory landscape and seize strategic opportunities. With strong, multi-disciplinary expertise and deep bench strength, clients rely on us for our creative problem-solving and for our practical, business-first approach.
To discuss how our fintech team can assist you, please contact one of the authors.
