Fintech in Canada Q3 2025

Canada's federal budget was released on November 4, 2025 and included some much-anticipated news for fintech. In this latest edition of our Fintech in Canada quarterly update, we look at the key announcements in Budget 2025 for the sector:

• The unleashing of stablecoins
• Fintech-focused changes to financial legislation
• Momentum for open banking and how fintechs can navigate the evolving landscape

We, along with many fintech industry participants, view the legislative changes announced in this Budget as having the potential to accelerate the growth of the Canadian fintech industry and encourage and stimulate financial services competition like never before.

Stablecoins (Finally) Unleashed

Long-awaited legislation was announced in Budget 2025 that would regulate the issuance of fiat-backed stablecoins under the supervision and responsibility of the Bank of Canada. The proposed Canadian framework is substantively similar to the US GENIUS Act, which we discussed in our Q2 2025 Fintech update, as taking a prudential approach to stablecoins as opposed to treating them as securities. Issuers of stablecoins under the new regulatory framework will be required to maintain adequate resere assets, establish redemption policies, implement risk-management systems, protect consumers’ personal and other sensitive information and comply with national security-focused provisions in the enacting legislation. There will also be amendments to the Retail Payments Activities Act (RPAA) that will ensure payment service providers that use prescribed stablecoins will fall within the RPAA framework.

These changes have been near-universally applauded in the Canadian crypto-asset and fintech community–in particular when also considering open banking, write access, data mobility rights and other fintech related changes also announced in this Budget and discussed elsewhere in this update.

We have long been commenting, in this newsletter and elsewhere, that Canadian stablecoin regulation needs to catch up to the rest of the world to encourage and facilitate the growth of Canadian dollar stablecoins or risk losing financial sovereignty. This view has been shared by many of the most influential participants in the fintech industry–many of which are very happy with the proposals in this Budget. With recent reports estimating that as many as 99% of all stablecoins issued globally are pegged to the US dollar, the changes announced in the Budget make it clear that the Canadian government is listening to the fintech and crypto-asset community and is working collaboratively with industry to ensure that Canada protects its financial sovereignty and plays a leading role in the building of this critical piece of the future global financial infrastructure. Minister of Finance François-Philippe Champagne, speaking at Toronto's MaRS Discovery District shortly after the release of the Budget, expressed that Canada is not merely trying to catch up when it comes to stablecoin regulation, but that the expectation is that the new regulatory posture will allow Canada to jump ahead in this space.

Further consultations and draft legislation are expected in Q4 2025–legislation that we expect will position Canada to take a lead role in global stablecoin and fintech regulation through a focus on regulatory certainty, trust and the emphasis on the rule of law.

Fintech-focused changes to financial legislation

Budget 2025 included a number of provisions related to fintech:

1. Amending the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) (PCMLTFA) to "better identify" entities with reporting obligations. Many Canadian and overseas fintechs struggle to determine whether they are subject to compliance obligations under the PCMLTFA as money services business or foreign money services businesses, particularly since the repeal of policy interpretation 7670 (which we wrote about previously in Anti-Money Laundering Rules Expanded to Include Payment Service Providers and Crowdfunding Platforms). Although the Budget does not describe the contemplated amendments in detail, many in the industry are hoping for additional clarity on which businesses are subject to the PCMLTFA.
2. Restrictions on cash transactions above C$10,000. The PCMLTFA would also be amended to restrict the acceptance of cash deposits into another's account of C$10,000 or more. Currently cash transactions above C$10,000 are reportable to FINTRAC but not restricted.
3. A new Financial Crimes Agency. The new Financial Crimes Agency (FCA) would be "Canada's lead enforcement agency on complex financial crimes". The FCA would be created under a new statute, and is expected to take on powers currently held by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), as well as police.
4. Amendments to financial sector regulation applicable to credit unions and fintechs. The Budget proposes to make it easier for provincially-regulated credit unions to become federally regulated (which could facilitate consolidation among credit unions). The Budget would also raise the 35 percent public holding requirement threshold from C$2 billion to C$4 billion (which would allow smaller institutions and digital banks to grow larger before having to change their ownership structure): a change that historically be more relevant for banks than fintechs, but would apply to the larger fintechs that we now see seeking banking licenses, such as Questrade which recently received approval to launch its digital bank, Questbank.

Open Banking in Canada: A Fintech's Field Guide to an Evolving Landscape

Budget 2025 also gives some long-awaited momentum for open banking in Canada with a number of pronouncements that together help forge a clearer path for fintechs in Canada.

This Field Guide for Fintechs highlights some of the major aspects of the Canadian open banking landscape of which fintechs operating in Canada, or hoping to operate in Canada, should be aware, and how they relate to each other:

• Budget 2025 announced that the Government will introduce legislation to complete the Consumer-Driven Banking Act (CDBA). In 2024, the Bennett Jones fintech team explored how the open banking framework introduced in the Government's policy statement will impact fintechs' obligations as participants in the open banking ecosystem in Budget 2024: Canada's Consumer-Driven Banking Framework. Albeit modified somewhat, it appears this framework will largely remain the underpinning for the CDBA which the Government says will include provisions for accreditation and common rules that address security, national security, liability and consent. Additional amendments will reinforce competition, clarify the inclusion of small- and medium-sized businesses and provide for a designated technical standards body. Amendments will also streamline governance and accreditation by leveraging the Bank of Canada's existing supervisory role for the Retail Payment Activities Act and registered payment service providers, discussed further below.

• Budget 2025 further asserts that Canada "…will accelerate a next phase of open banking, including legislating the ability to direct actions, such as switching accounts or making bill payments, or "write access," by mid-2027, once Canada's Real-Time-Rail project is live and in widespread use." 

• Related to the above, Budget 2025 reaffirmed the government's support for the launch of the Real-Time-Rail payment system. Fintechs should note that to participate directly in Canada's Real-Time-Rail payment system (and in any existing national payment system), they must apply to become a member of Payments Canada, the public organization that owns and operates Canada's core payment clearing and settlement infrastructure.

• Of note, the Bank of Canada provides oversight and risk management for Payments Canada's core payment systems. Budget 2025 announces Canada's intent to delegate oversight of the CDBA to the Bank of Canada which is currently also responsible for supervising retail payment service providers under the RPAA. The Bennett Jones fintech team has looked into the RPAA in previous blogs. Fintechs should note that if they fall within the broad definition of a payment service provider under the RPAA, they must be registered with the Bank of Canada. Broadly speaking, the RPAA requires that registrants meet certain regulatory requirements to manage risks and protect end user funds.

• Fintechs should also be aware that a formal accreditation process and set of criteria will apply to fintechs that want to participate in open banking. The Bank of Canada will evaluate applications and publish a list of accredited participants in a public registry. It appears that entities registered under the RPAA will be able to apply for streamlined accreditation.

• Two other Budget 2025 points of which fintechs should be aware on the open banking front are that the CDBA will amend Canada's federal privacy statute, the Personal Information Protection and Electronic Documents Act to ensure Canadians have access to an economy-wide right to data mobility, and that 'derived data' will be excluded from the scope of the CDBA. Derived data is described as data about a consumer, product or service that has been enhanced by a fintech participating in open banking to "…significantly increase its usefulness or commercial value." Accordingly, such data will not need be shared by fintechs at the request of a consumer. 

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.