Over the past year, cryptocurrencies and blockchain projects have been drawn closer to Canada’s mainstream financial system as the federal government, led by Prime Minister Mark Carney, pursues a regulation-first approach.
In November, Parliament passed the Canada Stablecoin Act, giving the Bank of Canada a central role in stablecoin oversight. Meanwhile, regulators are finalizing changes to rules governing crypto asset funds — touching custody, cold storage and custodial practices — and adapting National Instrument 81-102 to cover funds that include crypto holdings.
Observers say the direction matches Carney’s pragmatic but cautious posture: wary of some crypto uses while open to regulating and harnessing blockchain’s potential. As governor of the Bank of England, Carney questioned cryptocurrencies’ suitability as money but acknowledged that distributed-ledger technology could improve payment systems and financial stability. Industry analysts predicted his administration would prioritize detailed rules and stability instead of rapid liberalization.
Higher compliance standards and tougher scrutiny
Regulatory shifts have raised the operational bar for many crypto businesses. The Canadian Securities Administrators (CSA) eliminated the “restricted dealer” registration — a temporary category some crypto platforms had relied on. Affected companies now must register as full investment dealers and join the Canadian Investment Regulatory Organization (CIRO), the national self-regulatory body.
Naveen Maher, chief compliance officer at WonderFi, said the change has accelerated consolidation, forcing firms to either make significant compliance investments or exit the market. WonderFi proactively registered its Coinsquare platform with CIRO, accepting the higher costs to operate under what it describes as Canada’s most stringent regulatory standard. Firms that delayed registration face a steeper compliance climb.
Ottawa is also preparing to implement the OECD’s Crypto-Assets Reporting Framework (CARF). Although implementation has been deferred to Jan. 1, 2027, CARF will require annual reporting from crypto service providers — a heavy compliance burden, especially for smaller or offshore operators.
Enforcement is becoming more visible. Canada’s Financial Transactions and Reports Analysis Centre (FINTRAC) revoked the money services business (MSB) registrations of dozens of crypto firms, a step that has raised concerns about counterparty risk: compliant businesses can be exposed if their partners or service providers are shut down for noncompliance.
Regulators and industry still disagree on priorities
While Canadian rules are increasingly aligning with traditional finance standards, tensions remain. Government priorities emphasize financial stability, consumer protection and systemic risk mitigation — explaining the early focus on stablecoins. Industry participants want predictable, workable rules on stablecoins, custody and tokenization, and better coordination among overlapping regulators.
Currently, multiple agencies touch parts of the same crypto business: FINTRAC, the CSA, CIRO, the Canada Revenue Agency and provincial regulators. Officials say coordination is improving, but the framework is not yet seamless. Product access is another sticking point: Canadians still lack straightforward ways to hold crypto inside tax-advantaged accounts such as RRSPs and TFSAs, which limits mainstream adoption for retirement and long-term investing.
Preference for blockchain infrastructure over native crypto
Carney’s team draws a clear distinction between enterprise blockchain and decentralized crypto assets. Officials have shown more enthusiasm for tokenization and permissioned ledgers than for broadly distributed, native tokens. Project Samara — where Export Development Canada issued a CA$100 million bond on Hyperledger — is often cited as an example of government support for blockchain infrastructure.
Regulators remain cautious about DeFi, self-custody and on-chain settlement models that sit outside established oversight. Maher and others note Carney favors central bank digital currencies and regulated digital investment vehicles, while being less comfortable with decentralized models that lack traditional custodial controls. Products that map onto existing regulatory frameworks, such as Bitcoin exchange-traded funds, have tended to advance more quickly than decentralized or self-custodial offerings.
The upshot
Canada’s crypto market is growing, but under a high regulatory bar. Firms that align with established financial infrastructure and commit to compliance are well positioned. Smaller, offshore or noncompliant operators face increased hurdles and potential exit. As Ottawa implements CARF and continues to tighten oversight, the market will likely consolidate further around players who can meet the new standards.
This reporting is editorial in nature and does not constitute financial, legal or investment advice. Readers should carry out their own research and consult qualified professionals before making decisions.