Open Banking and Stablecoins Advance in Canada: A Regulatory Shift with Global Context

What Is Changing Under the Budget Implementation Act?

The Act advances three major areas that matter to financial services and compliance teams:

• A regulated open banking framework supervised by the Bank of Canada
• New oversight of stablecoin issuance and operations
• Amendments to the PCMLTFA that signal elevated AML expectations

Open Banking in Canada: The Shift Toward Regulated Data Sharing

Canada’s open banking framework, also called consumer-driven banking, is moving into its implementation phase. The Act provides the remaining legislative building blocks and assigns the Bank of Canada responsibility for regulating and supervising accredited entities.

Accredited participants will need to demonstrate strong privacy controls, liability management, cybersecurity safeguards, and operational resilience. This is a significant shift away from today’s unstructured data sharing practices and toward a standardized ecosystem similar to those found in the European Union, United Kingdom, and Australia.

So, what does open banking mean for service providers?

Open banking will require service providers to prove that their internal governance, data controls, vendor oversight, and incident response programs meet regulatory expectations. Companies lacking these structures will face barriers to accreditation.

Practical Actions for Businesses

• Review data architecture and ensure traceability across systems
• Strengthen vendor oversight and security testing requirements
• Update governance documents to reflect future accreditation standards
• Review FINTRAC related controls because many overlap with open banking expectations

For more background on the Canadian open banking landscape, see AMLI’s existing overview:

Stablecoin Oversight: The Bank of Canada Takes the Lead

The Act formally grants the Bank of Canada regulatory authority over stablecoin issuance and operations. This covers custodians, intermediaries, payment providers, wallet operators, and other entities connected to asset-referenced digital tokens.

Key requirements are expected to include:

• Reserve standards
• Liquidity requirements
• Redemption mechanisms
• Operational resilience
• Disclosure and reporting obligations

So, why is stablecoin regulation becoming a priority?

Digital assets are increasingly used for payments and cross-border transfers. Without clear rules, stablecoins can introduce systemic vulnerabilities. Central bank oversight aims to ensure that these instruments remain redeemable, transparent, and properly backed.

Impact on Canadian Digital Asset Firms

Organizations dealing with stablecoins will need to reassess:

• Reserve structures and custody arrangements
• Liquidity planning and stress scenarios
• Customer disclosures
• Reporting frameworks

For a look at AML obligations for crypto MSBs, see this blog post.

PCMLTFA Amendments: A Continued Tightening of AML Expectations

The Act also introduces amendments to the PCMLTFA. Early signals show that FINTRAC will gain expanded authority and that reporting entities will need to strengthen internal controls, monitoring frameworks, and cross-border reporting accuracy.

So, what types of changes should MSBs and fintechs expect under PCMLTFA updates?

The amendments may affect areas such as:

• Record keeping rules
• Suspicious transaction analysis
• Data sharing and reporting formats
• Obligations for new business models, including payment platforms

Canada has already been increasing AML oversight through expanded reporting categories and planned RPAA enforcement. Firms that operate as payment service providers should prepare for harmonization between PCMLTFA and RPAA expectations. See guide to determining RPAA applicability.

Understand how FINTRAC examines compliance programs.

How Canada’s Direction Compares to Global Developments

Canada’s new measures mirror international trends, although the pace and structure of implementation vary.

Open Banking Around the World

The European Union, United Kingdom, and Australia launched regulated open banking years ago with standardized APIs and clear accreditation processes. Canada is following a similar path, but governance will run through the central bank rather than multiple agencies.

Stablecoin and Digital Asset Regulation Abroad

• Brazil is evaluating taxation on cross-border crypto payments
• The Bank of England, MAS Singapore, and Bank of Thailand are testing synchronized FX settlement using tokenised systems
• The European Union’s MiCA framework has established detailed requirements for crypto and stablecoin issuers

Canada’s regime is still developing but is moving toward comparable oversight and risk standards.

Data Access and AML Trends in the United States

Major US banks have begun charging aggregators for access to customer data. This may affect fintech business models relying on such data. Canada’s model seeks to encourage innovation while enforcing strong privacy and consumer safeguards.

Implications for FinTechs, MSBs, Banks, and Credit Unions

These regulatory shifts will have operational and strategic consequences for all types of financial service providers.

Key Impacts

• Open banking accreditation will require evidence of governance maturity and risk controls
• Stablecoin related operations will be subject to liquidity, custody, and disclosure frameworks
• PCMLTFA amendments will increase expectations for AML program depth and documentation
• Payment firms may need to adjust practices to align with both PCMLTFA and RPAA requirements

Organizations should proactively update their internal programs rather than waiting for final regulatory details. Reviewing FINTRAC’s recent enforcement patterns can illustrate areas of regulatory focus.

So, what risks do businesses face if they delay preparing?

Delayed preparation can lead to accreditation failure, onboarding delays, regulatory findings, higher compliance costs, or remediation mandates. Early planning reduces these risks.

Key Takeaways

• Canada is transitioning open banking from consultation to regulated implementation
• The Bank of Canada will be central to stablecoin oversight
• PCMLTFA amendments indicate further AML tightening
• Canada’s approach aligns with global trends across data sharing and digital assets
• Companies should begin preparing for new requirements well before enforcement begins