Canada lags with stablecoin approach, but there’s room to catch up

Published

6 months ago

May 15, 2025

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Canada lags with stablecoin approach, but there’s room to catch up

The slow adoption of stablecoins in Canada has some local crypto industry observers concerned that the country is falling behind.

The Canadian Securities Administrators (CSA) classified stablecoins as “securities and/or derivatives” in December 2022 after the FTX debacle that shook markets and turned many lawmakers against the crypto industry.

Regulating stablecoins as a security has seen few local stablecoin issuers arise, but in the United States and the European Union, softening regulations have seen significant growth in the stablecoin market. This makes Canada, observers say, less competitive with other jurisdictions.

Of particular concern is the perceived gap in peer-to-peer (P2P) payments in Canada, which stablecoins are uniquely qualified to fill.

Local law constrains stablecoin growth and threatens dollar

In 2022, as the crypto market reeled from the collapse of FTX and the implosion of the Terra stablecoin system, regulators worldwide began to look more critically at the crypto space.

In Canada, the CSA updated regulations for crypto exchanges and brought stablecoins under its purview, classifying them as securities/derivatives. This hasn’t been a popular decision with Canada’s crypto industry.

Morva Rohani, founding managing director of the Canadian Web3 Council, told Cointelegraph that the CSA’s case-by-case basis for considering stablecoin issuers and the lack of a federal framework make for a “patchwork” regulatory regime.

“Canada’s reliance on securities law to regulate payment stablecoins introduces significant legal and operational uncertainty,” she said.

Tanim Rasul, chief operating officer of Canadian crypto exchange NDAX, said that the CSA “got it wrong,” stating that other regulatory frameworks, like the EU’s Markets in Crypto-Assets (MiCA) law, were more appropriate.

“I would just say, look at MiCA, look at the way they’re approaching stablecoins. It’s a payment instrument. It should be regulated as such,” he told a crowd at the Blockchain Futurist Conference in Toronto on May 13.

It’s not just the EU. Singapore and the UAE have also introduced regulatory frameworks for stablecoins, and US senators are optimistic they will pass a stablecoin law by May 26.

Rohani said Canada is “out of step with leading global jurisdictions […] which have adopted tailored, prudential frameworks that recognize stablecoins as payment instruments.”

This lack of alignment with other, more pro-stablecoin jurisdictions could have negative effects for the Canadian dollar (CAD), some worry.

Som Seif, founder of Canadian investment firm Purpose Financial, said that the proliferation of other major stablecoins, mostly denominated in the US dollar, could threaten the use of the loonie (a nickname for the Canadian dollar) at home.

“If Canada does not create the regulatory framework and environment that encourages the development of CAD stablecoins, consumers and businesses will default to using USD-pegged alternatives, eroding the relevance of CAD in global markets,” he said.

Stablecoins provide cheaper P2P payments but reputation is also a roadblock

Members of the Canadian crypto industry have stated that stablecoins have a role to play in the country as well, given the purported lack of P2P payment networks available in the country.

Speaking to Cointelegraph on May 13, Coinbase Canada CEO Lucas Matheson said, “It’s really important that we have a stablecoin for Canadians.” He said that the only options currently open were wire transfers, which “cost $45 and take 45 minutes of paperwork.”

Rohani said that Interac e-Transfer, a Canadian funds transfer service, “remains the primary domestic P2P rail, operating through banks and credit unions.”

Canada does have apps like PayPal and Wise, which support international P2P transfers, but those often come with high commissions and slow settlement times compared to stablecoins.

Rohani said that while some crypto platforms allow for P2P transfers, they’re not widely used due to a lack of integration into mainstream financial services.

Demand for more and different digital payment methods is growing in Canada, according to the 2024 digital payments report from Payments Canada, the owner and operator of Canada’s payment clearing and settlement infrastructure.

But that demand may not translate directly into stablecoins. Crypto’s “journey towards financial integration among Canadians remains a distant prospect,” the report reads. Some 91% of Canadians have never used crypto as a payment.

Payments Canada attributes the lack of interest to the assets being perceived as the “least secure payment method among Canadians compared to alternatives such as cash, credit cards, cheques, wire transfers and PayPal.”

Even in the context of a central bank digital currency, which the crypto industry generally regards as a less favorable option to private, fiat-denominated stablecoins, interest just isn’t there. The survey found that 85% of respondents “did not envision themselves using a digital Canadian dollar and preferred their existing payment methods.”

Is PM Carney pro-crypto?

If more tailor-made regulations could integrate stablecoins with the mainstream payment options Canadians are comfortable with, it would still take a concerted effort from policymakers in Ottawa, where the Liberals have just won the federal elections.

The crypto industry had cause for doubt. Liberal Prime Minister Mark Carney has previously expressed skepticism about cryptocurrency. In a speech as Governor of the Bank of England, he said they had failed as money.

Still, he acknowledged stablecoins have a role to play in retail and wholesale payments. He said in 2021 that stablecoins should have access to central bank balance sheets — but only if strong protections were in place.

“There’s been two systemic crises in money funds in little more than a decade […] In baseball, it’s three strikes and you’re out. In cricket, it’s only the equivalent of one. For systemic payment systems, one is too many,” Carney stated.

Kohani said, “With Mark Carney at the helm of the Liberal Party, we anticipate a pragmatic but regulation-first approach to crypto and stablecoins.”

While his previous openness toward stablecoins suggests he’s open to the technology, he also “emphasizes the need for regulation, oversight and safeguards.”

Another Liberal term, per Kohani, will likely mean the CSA continues to lead enforcement but could result in broader policy work, including a framework on stablecoins, “particularly if positioned as a tool for payments modernization and maintaining the relevance of the Canadian dollar.”

Magazine: Danger signs for Bitcoin as retail abandons it to institutions: Sky Wee

Politics

Regulators must catch up to the new privacy paradigm

Published

6 hours ago

November 9, 2025

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Regulators must catch up to the new privacy paradigm

Opinion by: Agata Ferreira, assistant professor at the Warsaw University of Technology

A new consensus is forming across the Web3 world. For years, privacy was treated as a compliance problem, liability for developers and at best, a niche concern. Now it is becoming clear that privacy is actually what digital freedom is built on.

The Ethereum Foundation’s announcement of the Privacy Cluster — a cross-team effort focused on private reads and writes, confidential identities and zero-knowledge proofs — is a sign of a philosophical redefinition of what trust, consensus and truth mean in the digital age and a more profound realization that privacy must be built into infrastructure.

Regulators should pay attention. Privacy-preserving designs are no longer just experimental; they are now a standard approach. They are becoming the way forward for decentralized systems. The question is whether law and regulation will adopt this shift or remain stuck in an outdated logic that equates visibility with safety.

From shared observation to shared verification

For a long time, digital governance has been built on a logic of visibility. Systems were trustworthy because they could be observed by regulators, auditors or the public. This “shared observation” model is behind everything from financial reporting to blockchain explorers. Transparency was the means of ensuring integrity.

In cryptographic systems, however, a more powerful paradigm is emerging: shared verification. Instead of every actor seeing everything, zero-knowledge proofs and privacy-preserving designs enable verifying that a rule was followed without revealing the underlying data. Truth becomes something you can prove, not something you must expose.

This shift might seem technical, but it has profound consequences. It means we no longer need to pick between privacy and accountability. Both can coexist, embedded directly into the systems we rely on. Regulators, too, must adapt to this logic rather than battle against it.

Privacy as infrastructure

The industry is realizing the same thing: Privacy is not a niche. It’s infrastructure. Without it, the Web3 openness becomes its weakness, and transparency collapses into surveillance.

Emerging architectures across ecosystems demonstrate that privacy and modularity are finally converging. Ethereum’s Privacy Cluster focuses on confidential computation and selective disclosure at the smart-contract level.

Others are going deeper, integrating privacy into the network consensus itself: sender-unlinkable messaging, validator anonymity, private proof-of-stake and self-healing data persistence. These designs are rebuilding the digital stack from the ground up, aligning privacy, verifiability and decentralization as mutually reinforcing properties.

This is not an incremental improvement. It is a new way of thinking about freedom in the digital network age.

Policy is lagging behind the technology

Current regulatory approaches still reflect the logic of shared observation. Privacy-preserving technologies are scrutinized or restricted, while visibility is mistaken for safety and compliance. Developers of privacy protocols face regulatory pressure, and policymakers continue to think that encryption is an obstacle to observability.

This perspective is outdated and dangerous. In a world where everyone is being watched, and where data is harvested on an unprecedented scale, bought, sold, leaked and exploited, the absence of privacy is the actual systemic risk. It undermines trust, puts people at risk and makes democracies weaker. By contrast, privacy-preserving designs make integrity provable and enable accountability without exposure.

Lawmakers must begin to view privacy as an ally, not an adversary — a tool for enforcing fundamental rights and restoring confidence in digital environments.

Stewardship, not just scrutiny

The next phase of digital regulation must move from scrutiny to support. Legal and policy frameworks should protect privacy-preserving open source systems as critical public goods. Stewardship stance is a duty, not a policy choice.

It means providing legal clarity for developers and distinguishing between acts and architecture. Laws should punish misconduct, not the existence of technologies that enable privacy. The right to maintain private digital communication, association and economic exchange must be treated as a fundamental right, enforced by both law and infrastructure.

Such an approach would demonstrate regulatory maturity, recognizing that resilient democracies and legitimate governance rely on privacy-preserving infrastructure.

The architecture of freedom

The Ethereum Foundation’s privacy initiative and other new privacy-first network designs share the idea that freedom in the digital age is an architectural principle. It cannot depend solely on promises of good governance or oversight; it must be built into protocols that shape our lives.

These new systems, private rollups, state-separated architectures and sovereign zones represent the practical synthesis of privacy and modularity. They enable communities to build independently while remaining verifiably connected, thereby combining autonomy with accountability.

Policymakers should view this as an opportunity to support the direct embedding of fundamental rights into the technical foundation of the internet. Privacy-by-design should be embraced as legality-by-design, a way to enforce fundamental rights through code, not just through constitutions, charters and conventions.

The blockchain industry is redefining what “consensus” and “truth” mean, replacing shared observation with shared verification, visibility with verifiability, and surveillance with sovereignty. As this new dawn for privacy takes shape, regulators face a choice: Limit it under the old frameworks of control, or support it as the foundation of digital freedom and a more resilient digital order.

The tech is getting ready. The laws need to catch up.

Opinion by: Agata Ferreira, assistant professor at the Warsaw University of Technology.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.