Cryptocurrencies and blockchain technology have moved closer to Canada’s core financial system over the past year as Ottawa pursues a regulation-first strategy under Prime Minister Mark Carney.
In November, Parliament adopted stablecoin rules through the Canada Stablecoin Act, giving the Bank of Canada authority to regulate stablecoins. Policymakers are also finalizing amendments to rules for crypto asset funds — including custody, cold wallets and custodians — and adjusting national investment-fund regulation (National Instrument 81-102) to cover crypto-containing funds.
Observers say the approach reflects Carney’s pragmatic but cautious stance: skeptical of some crypto uses while pragmatic about regulating and harnessing underlying technologies. As governor of the Bank of England, Carney questioned cryptocurrencies’ role as money but also noted blockchain’s potential to improve financial stability and payment services. Industry voices predicted his administration would prioritize rules and stability over rapid liberalization.
Increased scrutiny and higher standards
Regulatory moves have increased scrutiny and raised the operational bar for crypto firms. The Canadian Securities Administrators (CSA) closed the “restricted dealer” category, a temporary registration status used by some crypto platforms that did not fit traditional dealer classes. Affected firms must now become full investment dealers under the CSA and join the Canadian Investment Regulatory Organization (CIRO), a national self-regulatory body.
Naveen Maher, chief compliance officer at WonderFi, said the change prompted consolidation and forced firms to either invest heavily to meet the new standard or exit. WonderFi moved early to register under CIRO through its Coinsquare platform, accepting the compliance costs to operate “under the highest available regulatory standard in Canada.” Firms that delayed face a steeper compliance climb.
Ottawa is also preparing to implement the Organisation for Economic Co-operation and Development’s Crypto-Assets Reporting Framework (CARF). Implementation was pushed to Jan. 1, 2027, but when in force it will impose annual reporting obligations on every crypto service provider in Canada — a potential challenge for smaller or offshore operators.
Enforcement of registration requirements is also more visible. Canada’s Financial Transactions and Reports Analysis Centre (FINTRAC) revoked the money services business (MSB) registrations of dozens of crypto businesses, prompting industry warnings about counterparty risk: if partners are noncompliant, compliant firms may be exposed.
Industry and regulators remain apart on priorities
While standards for crypto are converging with those for traditional finance, differences in emphasis persist. The government’s top priority is financial stability, consumer protection and preventing systemic risk — which is why stablecoins commanded early attention. Maher says U.S. developments, such as proposed federal stablecoin frameworks, pushed Ottawa to act.
The industry, by contrast, seeks clear, workable rules on stablecoins, custody and tokenization, and better harmonization across overlapping regulators. Maher notes fragmentation remains: FINTRAC, the CSA, CIRO, the Canada Revenue Agency and provincial regulators each touch different aspects of the same business. Coordination is improving but not yet seamless.
Product access is another concern: Canadians still lack straightforward ways to hold crypto in registered retirement savings plans (RRSPs) or tax-free savings accounts (TFSAs), limiting mainstream adoption in retirement and tax-advantaged investing.
Some policymakers still favor blockchain over crypto
Carney’s administration distinguishes between blockchain infrastructure and crypto assets. Policymakers are more comfortable supporting tokenization projects and enterprise blockchain than broadly endorsing decentralized crypto assets. Project Samara — where Export Development Canada issued a CA$100 million bond on Hyperledger — exemplifies official enthusiasm for blockchain as infrastructure.
Regulators remain cautious about crypto assets themselves, viewing them primarily through a risk and investor-protection lens. Maher says Carney favors central bank digital currencies and regulated digital investment categories while being less comfortable with DeFi, self-custody and native on-chain settlement that sit outside traditional regulatory frameworks. Products that map neatly onto existing frameworks, such as Bitcoin exchange-traded funds, advance more readily than decentralized or self-custodial models.
The result is a Canadian market that is being built up under high regulatory standards: firms aligned with established financial infrastructure and willing to invest in compliance are well-positioned, while smaller, offshore or noncompliant players face greater barriers.
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