Canada opens bank stablecoin access, but strips deposit guarantees
Summary
Canada’s Budget 2026 proposes requiring federally regulated banks and other financial institutions to issue stablecoins through separate subsidiaries, bringing those issuers under the Stablecoin Act. The proposal would also extend the framework to foreign financial institutions not prudentially regulated in Canada. Covered tokens would need redemption at face value, fully backed reserves and qualified custody, while remaining distinct from insured deposits or government-guaranteed instruments. The Bank of Canada would register and supervise nonbank issuers and enforce compliance. The Act has received royal assent, but its provisions await commencement orders; the wider framework is intended to begin in fall 2027.
