Finance Committee on Jan. 26th, 2026

[Gloria Wong, Director, Digital Assets, Department of Finance]

Thank you for the question.

The goal of this measure is to provide a regulated space for issuers to issue stablecoins with certainty. Prior to this, there was no comprehensive regulation in Canada to regulate the issuance of stablecoins that flow across interprovincial and international borders. The goal of the act is to provide certainty for issuers who want to do this.

Ultimately, this would support innovation and people's confidence in the instrument and the use of it in digital payments.

[Matt Strauss, Conservative, Kitchener South—Hespeler, ON]

Thank you for that.

Can you tell me how this is possible? If I make a cryptocurrency, call it “Mattcoin”, say its value is supposed to be one dollar U.S., and people are trading it online, how does the Government of Canada even become aware this is happening? If there's a rug pull—I'd never do that—and Mattcoin goes to zero, how does the Government of Canada step in if I'm a mathematician in my basement in California?

[Gloria Wong]

This framework requires stablecoin issuers to register with the Bank of Canada. Issuers would have to submit an application to the Bank of Canada to let them know they're issuing a stablecoin that flows across international borders.

In terms of how we ensure that the value of the stablecoin stays the way it is, the proposed measure has requirements for reserve backing. For example, if an issuer issues a stablecoin that they claim is worth one loonie, they are required to put a loonie's worth of liquid asset as reserve so that when the holder of the stablecoin wants the money back, they can have confidence that they can have their loonie back.

[Matt Strauss, Conservative, Kitchener South—Hespeler, ON]

If I'm operating in California and I make a stablecoin, and Canadians are buying it online, but I choose not to register with the Government of Canada.... I don't understand how the long arm of the law comes after me. It's a digital asset.

[Gloria Wong]

That's a great question. This is something we're working on with the Bank of Canada, as the regulator, to ensure that we could implement the framework effectively with respect to foreign issuers.

[Matt Strauss, Conservative, Kitchener South—Hespeler, ON]

I'm concerned that it's impossible. If you create a digital asset in Moldova, you can work with the Government of Canada and the Bank of Canada all you want, but I don't understand how you ever....

It seems that the act is seeking to regulate something that is unregulatable.

[Gloria Wong]

If I may, there is another perspective to this. Many issuers who want to sell their stablecoins to Canadians are actually looking to be regulated under the federal framework, because it provides them with legitimacy. It is the way to provide their users with the confidence that their stablecoin is safe and people can use it with confidence.

[Matt Strauss, Conservative, Kitchener South—Hespeler, ON]

For myself, as someone who banks in Canada and a Canadian citizen, I'm just looking at the definition of stablecoin—“a digital asset that is intended or designed to maintain a stable value” relative to some fiat currency. Why would I, as a consumer, ever be interested in buying a stablecoin with a value of one loonie rather than having one loonie in my digital bank deposit? Isn't that a digital store of value? There is no loonie in existence when RBC has my bank account. If there's one loonie in my bank account, that loonie doesn't actually exist. It's a digital asset, is it not? How is this different?

[Gloria Wong]

It gets to the potential use cases of fiat-backed stablecoins. You are right that, for many Canadians, stablecoins are not something they use day in and day out right now, but stablecoins are gaining in popularity in the use of international remittances. For example, under international use cases—

[The Chair, Liberal, Karina Gould]

I apologize, Ms. Wong, but that is time.

Thank you, Mr. Strauss.

We'll continue with Mr. Leitão for five minutes, please.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Thank you very much, Madam Chair.

Let's continue with stablecoins and why we're doing this, because that's exactly where I wanted to go. Please continue. You were saying that in terms of remittances, that's one of the more interesting outlets for stablecoins.

[Gloria Wong]

Yes. This is one of the use cases around the world that are gaining in popularity. As you may be aware, right now, if somebody wants to send an international cross-border transfer to another country, it takes a very long time. The stablecoin has the potential to allow for real-time settlement and is more easily transferred across borders. This is one use case as payment that is gaining in popularity these days.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

I stand corrected, then. If you're a Canadian company or business thinking of issuing and offering stablecoins to the Canadian public, you have to register. If you're not registered, then, technically, you cannot offer the product to the population. It's just not allowed. If consumers then buy that in the parallel market, they won't get any protection from the authorities.

The first step is to make sure the providers are registered. Once they are registered, they can offer the product. There's a one-to-one ratio of real assets behind the issue. If I understand correctly, the greatest advantage is the speed of execution of transactions. You can make transfers very quickly; with more conventional payment systems, it can take awhile. Then there's the issue of the float: Where is the money? The money leaves your account but doesn't get to the other account for a long time; in the meantime, somebody is making some money.

For stablecoins, I see the interest and the usefulness—of course, first we have to pass the bill—but can you tell us how far the government is in the process of moving ahead with this product? First, you need the legislation, but then you need to engage with the Bank of Canada to set up the parameters for the registration process. How is that work going?

[Gloria Wong]

As you may be aware, the current legislation is relatively high-level, so the key will be to develop regulations for the associated legislation. The department is ready to move as soon as the bill receives royal assent.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

As soon as we get royal assent, there will be a number of things that we can do, and that will be one of them.

How much time do I have left, Madam Chair?

[The Chair, Liberal, Karina Gould]

Two minutes.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Oh, my goodness, it has to be fast.

On consumer banking, one measure in the budget—and perhaps you could explain it more clearly than I can—is to make sure that.... When consumers, often elderly people, deposit their cheque in their chequing account, sometimes there's a hold. Funds are kept on hold because you have to wait for the cheque to clear. If I understand correctly, there are some measures in the budget that will diminish the amount of funds that will be kept on hold until the cheque clears. Am I interpreting it correctly?

[Mark Radley, Director, Consumer Affairs, Department of Finance]

Yes, that's right. There's one main thing in the BIA, and that is to increase the amount of available funds. Typically, when a consumer deposits a cheque at a bank, they have immediate access to $100, and the rest.... There are a few different time periods, but it will be held for several days. What the BIA proposes here is to increase that first available amount to $150.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

As a quick question, why do we need a legislative change to do that? Couldn't the Department of Finance just tell the banks to do that?

[Mark Radley]

Regulation is another option. I would note, as well, that the budget also spoke to the plan to develop some regulations to decrease the whole period.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Okay, thank you.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Leitão.

Mr. Garon, you have the floor for two and a half minutes.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you, Madam Chair.

First, regarding my previous questions, I won't raise a point of order, but, if possible, I would very much like us to follow up with the department to ensure that I get answers, Madam Chair.

I have a question about division 17 of part 5 of the bill, which deals with the Canada Deposit Insurance Corporation Act, the Bank Act and the Financial Consumer Agency of Canada Act.

The text of the federal act states that it is up to the recipient of the data to obtain consent. In Quebec, however, Desjardins is required to obtain the consent of its customers in accordance with Bill 25, which applies to Desjardins.

In short, the crux of the matter here is that there seems to be a discrepancy between the legislative provisions that will apply to federal co-operatives and those that will apply to Desjardins. I was wondering if there had been any conversations with Quebec or if steps had been taken with the province to ensure regulations are similar and aligned, since Quebec's Bill 25 was passed not too long ago.

[Kïrsten Fraser]

The core piece of information here is that it's the consumer initiating the transaction. The consumer is dealing with one entity and being asked to give their consent to receive information from the other entity in order to provide a service or product.

[Jean-Denis Garon, Bloc, Mirabel, QC]

I understand that. We can understand how that works and why.

However, the fact is that Quebec just passed a law barely a year and a half ago that deals with the same issue and applies to Desjardins, the largest financial co-operative in the country and the largest financial institution in Quebec. I'm wondering whether there have been conversations to ensure that the discrepancy between the two regulations will be resolved?