TL;DR
- Bill C-15 (Stablecoin Act) officially recognizes stablecoins as payment infrastructuregiving Canada a basis to compete in a global stablecoin market that has surpassed 400 billion Canadian dollars.
- The general prohibition on paying provided for by the Law interest or return “directly or indirectly” is wide enough to capture activity-based rewardsleaving CAD stablecoins unable to compete with USD instruments that pay holders.
- Regulatory fragmentation in the provincial and federal frameworks, it left three CAD stablecoins under three regimes; implementing regulations must be clearly defined federal predominance arrangement.
- Kraken is the first platform to list QCADthe first fully compliant system in Canada CAD stablecoinand now allows holders to earn rewards.
Canada is at an inflection point. With the passage of Bill C-15 (Stablecoin Act), the country has taken a significant step forward, officially recognizing stablecoins as payment infrastructure and laying the foundation for a regulatory framework that positions Canada as a serious participant in the next generation of global finance. This work was hard-earned and it counts.
The opportunity now is to urgently build on this foundation. The global market for stablecoins (tokenized fiat that allows instantaneous and programmable transfer of value) has exceeded 400 billion Canadian dollars in market capitalization. These are no longer niche crypto instruments or experimental products.
Stablecoins set up in seconds, operate 24/7, and move around the world without relying on traditional banking hours or correspondent networks. They are quickly becoming essential infrastructure for how value flows across the Internet.
Canada has earned a seat at the table. The question now is how to build on the solid foundation established by the Parliament of Canada. Failing to build on this foundation risks ceding billions in capital and future economic activity to countries that move faster, and the window to act is open now. The legislation is in place. What happens next depends entirely on the quality of the regulations that follow.
Stablecoins become the payment layer of the digital economy
Stablecoins are tokenized fiat currencies, digital representations of sovereign money that combine price stability with the speed and programmability of blockchain networks. The advantages of stablecoins are numerous.
They enable faster, lower-cost, programmable payments with real-time settlement, reducing friction in cross-border commerce and enabling digital markets to operate globally.
For consumers, this means reduced remittance costs and wider access to digital financial services. For merchants, this means immediate settlement, reduced chargeback risk, and seamless global reach.
The global transition to tokenized payments is well underway and Canada is well positioned to be part of it. Building on the framework established by Bill C-15, ensuring that the DAC is accessible in symbolic form will be essential to translate legislative intent into real impact for Canadian businesses and consumers.
The risk: the Canadian dollar is falling behind
Canadians effectively only have access to one compliant dominant stablecoin (an instrument pegged to the US dollar), with the CAD stablecoin ecosystem only beginning to emerge. This is changing. QCAD received its final prospectus approval from Canadian securities regulators in November 2025, becoming the first fully compliant CAD stablecoin in Canada. Recognizing the importance of this development, we listed QCAD in April and are now excited to launch rewards for QCAD holders.
This momentum is real, but it faces structural obstacles inherent in Bill C-15 itself. The law currently prohibits stablecoin issuers from paying interest or yield “directly or indirectly,” language that the CD Howe Institute called stricter than the U.S. GENIUS Act, broad enough to capture activity-based rewards.
The potential consequences are dire: a Canadian user holding QCAD on Kraken could earn nothing, while a US user holding USDC on a foreign platform would earn 3.35%. Without a solution, Canadian dollar stablecoins cannot compete on their home turf, and Canadian users will default to US dollar-denominated instruments or go offshore entirely.
Fragmentation makes the problem worse. Different stablecoins have arrived via different regulatory routes, and not all have achieved the VRCA (Value-Referenced Crypto Asset) compliance required for listing on registered platforms like Kraken.
The Stablecoin Act does not expressly override provincial securities law, leaving open the possibility of dual regulation. The result is three CAD stablecoins operating in three different frameworks, not the basis of a competitive national ecosystem.
The implementing regulations for the Stablecoin Act, currently being drafted, must directly address these two issues: a clarification that activity-based trading rewards do not fall within the scope of the yield ban, and a clear provision of federal override or coordination mechanism with provincial regulators.
Without both, Canada will have a framework law without a unified framework. The opportunity is significant: a well-designed federal framework keeps Canadian capital, users and innovation on regulated infrastructure in Canada.
Regulations that reflect the function
The basis for the growing adoption of the CAD stablecoin is a regulatory framework that matches how these instruments actually operate. Bill C-15 was an important step in this direction, officially recognizing stablecoins as payment infrastructure rather than investment products, and establishing that they are distinct from securities or derivatives.
This distinction is important and draft regulations must implement it consistently.
We believe that the federal framework developed by the Department of Finance, under the oversight of the Bank of Canada, offers the most promising path forward. We hope to see it:
- Solve fragmentation and overlapping regulations in provincial and federal jurisdictions
- Provide clarity for issuers, exchanges and consumers on what compliance looks like in practice
- Strengthening the role of stablecoins as payment infrastructurein accordance with the intent of the Stablecoin Act
- Replace the cover “directly or indirectly” yield ban with a framework that enables compliant reward and redemption programs, consistent with the U.S. GENIUS Act approach
We look forward to working with the Department of Finance and the Bank of Canada over the coming months to help shape a framework that will achieve these goals.
Canada has an opportunity and we are acting
We have deep roots in Canada, with hundreds of employees and many loyal customers. Canada’s stablecoin ecosystem is gaining real momentum. We are proud to support this growth as the first platform to list QCAD, a fully CAD-compliant stablecoin, and allow its holders to earn rewards. We look forward to continuing to expand compliance options for Canadian customers.
QCAD enables our Canadian and international clients to maintain and increase their exposure to CAD, without sacrificing access to liquidity, 24/7 markets and innovative financial use cases that are lacking in traditional finance.
Ensuring the Canadian dollar remains relevant in the next financial era will require both political leadership and market action. Tokenized fiat currency is already becoming foundational infrastructure globally, and the dynamics here at home, from Bill C-15 to the emergence of compliant CAD stablecoins, puts Canada in a real position to shape the future.
CAD belongs on the chain, and the foundation being built today is what will make it a reality.
Although the term “stablecoin” is commonly used, there is no guarantee that the asset will maintain a stable value relative to the value of the reference asset when traded in secondary markets or that the asset reserve, if any, will be sufficient to satisfy all redemptions.
Payward Canada Inc., trading as Kraken, is registered as a money services business with FINTRAC (M19343731) and as a restricted dealer with the Ontario Securities Commission and the securities regulators of each of Canada’s provinces and territories.
