Stablecoins Are About to Matter to Canadian Lenders

Abstract: Our Crypto Roundtable argues that stablecoins are no longer a peripheral crypto story but an emerging piece of financial infrastructure with real relevance for the Canadian lending market. For the CLA community, their importance lies in two roles: as a new asset that may increasingly be used as collateral for lending, and as new payment rails that can move funds instantly, globally, and around the clock. As Canada develops a federal framework for stablecoins, the key challenge will be to ensure the regime is not only credible, but also harmonized, competitive, and workable across the wider financial ecosystem.

For years, stablecoins occupied an odd place in finance: too large to dismiss, too novel to fit comfortably into existing law, and too often treated as a crypto-side curiosity rather than a serious policy file. Canada is now moving beyond that ambiguity. The federal government has proposed a dedicated framework for fiat-backed stablecoins through Budget 2025 and Bill C-15, with the Department of Finance explicitly aiming to make such instruments safer to hold and use in Canada through reserve, redemption, governance and security requirements. At the same time, OSFI has confirmed that its targeted fast-track approvals framework for certain new entrants is due to launch in June 2026. These are not marginal adjustments. They suggest that Ottawa and the federal regulatory apparatus are beginning, however cautiously, to treat digital money as part of the country’s financial infrastructure. (Canada)

That matters for the Canadian Lenders Association (CLA) community. Stablecoins are still too often discussed as if they matter only to exchanges, traders, and the more speculative edges of fintech. That misses the point. Their significance lies in what they may do, not in the hype that has surrounded them. Properly regulated stablecoins could become both a new asset class and a new set of payment rails. For lenders, those are two distinct but equally important developments. One could change what can be used as collateral. The other could change how funds move.

1. Stablecoin as a secure asset: A well-structured fiat-backed stablecoin is not merely a token. It is, in essence, a digital claim designed to maintain stable value relative to a currency, backed by reserves and redeemable at par under a formal legal regime. That matters because it creates the possibility that stablecoins may increasingly be treated as assets against which credit can be extended. In other words, stablecoins may become collateral. Once an instrument is sufficiently credible, sufficiently liquid and sufficiently operationally transparent, lenders begin to ask a familiar question: can money be advanced against it? In digital-asset markets that question is already common.In mainstream Canadian finance, it is still nascent. But it will not remain so for long.

   For the CLA community, the implications are substantial. Stablecoins may eventually support new forms of secured lending, liquidity lines, treasury-backed credit products, short-duration credit facilities and digital collateral management. They could prove especially relevant in environments where speed, verifiability, programmability and transparency are commercially valuable. In time, lenders may not only finance the acquisition of traditional assets; they may also lend against regulated digital stores of value held in wallets, platforms or custody arrangements that can be monitored and managed in real time. That is not a trivial shift. It means stablecoins may enter lending not just as a payment medium, but as an asset class embedded in the balance-sheet logic of credit.

2. Stablecoin as the rails: The second use case may be even more consequential: stablecoins as rails. Here the attraction is almost embarrassingly simple. Today much of finance still moves through old plumbing. Payments can be delayed, cross-border transfers are costly and opaque, settlement is often constrained by banking hours, intermediary chains and legacy infrastructure. Stablecoins promise a different model. They allow value to move instantly, globally and continuously, rather than only when the traditional system is awake, aligned and willing. As Eric Richmond, General Counsel and Head of Business Development at Shakepay, put it during the CLA’s Crypto Roundtable, stablecoins offer “near instant settlements,” “24/7 rails,” and something that is “global” and “programmable.” In this role, the stablecoin is not the thing being financed. It is the channel through which funds travel.

   For lenders, servicers, merchants, platforms and treasury teams, that changes the economics of movement itself. Consider what that means in practice. Loan disbursements could settle faster. Merchant payouts could become more immediate. Cross-border collections and supplier payments could become less cumbersome. Treasury teams could move cash with greater speed and precision. Embedded-finance platforms could build more responsive products on top of programmable payment infrastructure. Stablecoins may not replace every domestic payment rail, nor should they. But they introduce a credible alternative architecture, one that is global by design and operational around the clock. In a financial system that still tolerates needless delay and friction, that is no small thing.

It is precisely because stablecoins can function as both asset and rail that the policy debate matters so much. The case for regulation is not hard to make. The Department of Finance’s framework focuses on an obvious gap: there is currently no comprehensive federal regime governing the issuance of fiat-backed stablecoins in Canada. The government’s proposed answer is to regulate non-prudentially regulated issuers through a national regime that requires proper reserves, redemption at par, sound governance and data-security safeguards. As Vladimir Shatiryan, Partner at Blakes, explained to the CLA roundtable, “This is legislation that will specifically regulate stablecoin issuers.” That point is important. Canada is no longer dealing with stablecoins only through fragmented guidance and analogy. It is beginning to build a defined issuance regime. (Canada)

That makes sense. If a privately issued instrument is going to be used like money for payments, treasury functions or collateral, people need to trust that it is properly backed and can be redeemed at full value. That is the starting point. No lender will accept a stablecoin as collateral unless it believes the asset can truly be turned back into cash at par. No finance platform will build on it unless it trusts that the reserves behind it are real. On that point, Ottawa is right to start with caution and credibility.

But having a framework is not the same as having a clear and workable market. Canada’s problem is usually not too few rules. It is too many overlapping rules from different jurisdictions. The federal government may regulate the issuance of fiat-backed stablecoins by non-bank issuers, but that is only part of the picture. Provincial securities regulators, market-conduct rules, and the treatment of trading and distribution will still matter. Without better coordination, Canada could end up with a framework that makes sense on paper but is confusing in practice. That would be familiar: well-intentioned regulation that leaves the market unsure how things are actually supposed to work. (Canada)

Here again, the roundtable discussion was instructive. Eric Richmond warned that “you don’t really want to have a hybrid regulatory approach” with “duplicative standards and duplicative regulatory regimes for one specific asset.” Vladimir Shatiryan made a parallel point from the legal side, noting that while the federal government can legislate for federal purposes, the provinces and their securities regulators will still need to align if the framework is to work smoothly in practice. For the CLA community, this is not an abstract constitutional concern. It is a commercial one. Markets do not scale well when rules conflict.

This is where the CLA’s role becomes important. The association is not solely a crypto advocate. Its strength lies elsewhere. It represents a broader lending and financial-services ecosystem that includes consumer, automotive, real estate and SMB lenders, along with fintechs, infrastructure providers, fraud specialists, compliance leaders and servicing platforms. That breadth matters because stablecoins are not a sectoral issue. They are a cross-cutting one. They touch payments, collections, treasury movement, collateral design, KYC, AML, fraud controls, consumer disclosure, operational resilience and market access. An association that sees only one slice of the market will necessarily see only one slice of the problem. The CLA can take a wider view.

That broader perspective is especially important when competitiveness is at stake. A regime that is too loose will not build trust. A regime that is too restrictive will push business elsewhere. One of the most debated parts of Canada’s proposed framework is the ban on paying direct or indirect interest or yield on stablecoins. The goal is clear: policymakers do not want privately issued digital money to function like a bank deposit without being regulated like one. That concern is reasonable. But if the rules ban every kind of return, reward or customer incentive, the framework may become too rigid to be useful. Money and innovation will not stay in a market that gives them no room to develop. If Canada creates a regime that is safe but too limiting, the most active parts of the market may simply move to more flexible jurisdictions. (Canada)

That does not mean Canada should race to the bottom. It means it should distinguish carefully between what is genuinely dangerous and what is merely new. There is a meaningful difference between an opaque promise of high yield built on hidden risk and a more modest framework for rewards, incentives or operational utility tied to a regulated payment instrument. Good regulation can tell the difference. Lazy regulation cannot. The challenge for Ottawa, the Bank of Canada and the wider policy apparatus is not simply to write prohibitions. It is to write distinctions.

OSFI’s new targeted fast-track approvals framework offers another revealing signal. The regulator says the framework, due to launch in June 2026, is meant to create a clearer process for certain eligible applicants seeking to enter the federally regulated system. It is not a reduction in prudential standards. It is, in principle, a modernization of process. That is welcome. In finance, process is never neutral. A market in which entry is theoretically possible but practically glacial is a market that favours incumbency whether it admits it or not. If Canada is serious about innovation in banking, trust, custody and adjacent financial infrastructure, then it must care not just about the rulebook but about the route into the rulebook. (OSFI)

Vladimir Shatiryan put this well in his remarks on the OSFI initiative. The process, he noted, will be “a two-way street”: the regulator may expedite its review, but applicants will also need to be ready to meet significantly accelerated timelines and documentation demands. That is a useful reminder. Faster regulation is not the same thing as easier regulation. But it may still be a meaningful step toward a more workable path for innovation inside the perimeter.

For the CLA community, then, the stablecoin discussion is not about taking sides in a crypto culture war. It is about asking practical questions that lenders and financial firms will increasingly have to answer. Will stablecoins become acceptable collateral in certain lending models? Will they support new secured-credit products or new treasury-backed facilities? Will they become part of the rails over which loan proceeds, repayments, settlements and cross-border transfers move? How should firms manage the fraud, sanctions, AML, custody and consumer-protection implications that follow? What kind of federal-provincial coordination is needed so that the legal status of these instruments is clear enough for businesses to build on them? Those are CLA questions if ever there were any.

The right approach for the association is neither blind enthusiasm nor reflexive skepticism. It should support a framework that makes fiat-backed stablecoins credible and usable, while also pushing for rules that are consistent across jurisdictions, workable in practice, and realistic about how markets develop.

That means favouring harmonization over overlap. It means paying close attention to how the rules are implemented, especially where regulations and guidance will determine whether the framework is simply restrictive or genuinely useful. And it means recognizing that stablecoins should be understood not just as digital tokens, but as potential collateral and as new rails for moving money.

The main point is this: Canada is finally starting to decide what role digital money should play in its financial system. That decision will reach far beyond the crypto sector. It will shape how value is held, how it is used as collateral, how it moves, and who gets to build the infrastructure around it. Stablecoins are no longer a side issue in Canadian finance. They are becoming a test of whether Canada can regulate a new form of financial infrastructure without choking off its potential. For the CLA, the role is not to promote the idea uncritically, but to help shape a framework that builds trust while still working for the broader market.

Key Points

1. Stablecoins are becoming mainstream financial infrastructure
   They are moving beyond speculation and increasingly matter for payments, settlement, treasury movement, and financial-product design.

2. Stablecoins may become assets to lend against
   As regulated, redeemable digital assets, they could support new forms of secured lending, liquidity facilities, and digital collateral management.

3. Stablecoins can function as new rails for moving money
   They offer the potential to move funds instantly, globally, and continuously, reducing friction in cross-border transfers, disbursements, and settlements.

4. Canada’s regulatory framework now matters commercially
   The emerging federal stablecoin regime will shape whether these instruments become credible and usable for lenders and the broader financial-services market.

5. The CLA has a meaningful role to play
   Because stablecoins touch lending, payments, fraud, AML, compliance, and innovation, the CLA is well placed to help advocate for a framework that works for the full ecosystem.

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