Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Canada’s Economic Update Tightens Fintech Operating Model
Apr 28, 2026 | NCFA Insight | Risk Compliance And Regtech, Digital Assets Blockchain And Tokenization, Open Banking Open Finance And Data Sharing, Payments And Market Infrastructure, Capital Markets And Funding
Canada Links Competition With Tighter Controls Across Fraud, Payments, and Financial Access
On Apr 28, 2026, the Government of Canada released its Spring Economic Update key measures. For fintech and financial institutions, a deeper and more integrated operating model is now taking form across fraud, payments, digital assets, banking fees, data access, and capital formation. Canada wants more competition in financial services, but not at the cost of weak controls. The update points to a more disciplined market where firms can win through lower costs, faster rails, better data access, and stronger fraud prevention (at least that's the strategic read).
François Philippe Champagne, Minister of Finance and National Revenue, Government of Canada:
“From geopolitical shifts to supply chain disruptions to rapid technological breakthroughs, including in artificial intelligence, the world is changing quickly and Canada must adapt to thrive.”
Fraud To The Center of Financial Policy
The update treats fraud as a structural weakness in the financial system, not just a policing problem. Canada will establish the Financial Crimes Agency as a dedicated federal body for serious and complex financial crime, with police powers, civilian leadership, specialized personnel, and an asset recovery mandate.
The funding is material. Ottawa proposes $352.7 million over five years and $82.1 million ongoing for the agency, plus $46.2 million over five years for the Public Prosecution Service of Canada and $19.6 million over five years for the Department of Finance Canada.
See: AI Security Models Create A Patch Overload Crisis
For fintechs, banks, platforms, and payment firms, this raises the bar. Fraud controls now need to work across onboarding, funding, transactions, identity, communications, reporting, and recovery. A good product experience will not carry a weak risk model.
Crypto ATMs Face Federal Ban
The clearest digital asset measure is the proposed crypto ATM ban. Annex 2 goes further than a policy signal. It proposes amendments to the Proceeds of Crime Money Laundering and Terrorist Financing Act and regulations to make it a criminal offence to operate a cryptocurrency automated teller machine.
Crypto ATMs connect cash to crypto quickly with limited friction, and can move scam proceeds outside the banking system before recovery becomes realistic. CBC reported that Canada has nearly 4,000 crypto ATMs, the most per capita in the world, and that some smaller deposits require only a phone number when under $1,000.
It's a targeted intervention of digital assets at what the government feels is the weakest access point. Serious crypto firms, custodians, exchanges, and tokenized finance builders should take note. Regulatory pressure will always look to where where money enters, exits, and escapes oversight.
MSBs Tighter Registration And Oversight
The update recognizes that money services businesses support remittances, currency exchange, digital payments, competition, and inclusion. It also says criminals increasingly abuse MSBs for money laundering, terrorist financing, sanctions evasion, and fraud.
FINTRAC revoked the registration of 84 MSBs in March 2026 alone. Ottawa now proposes new Ministerial Directive powers, expanded authority for FINTRAC to refuse or revoke MSB registration, measures to prevent non compliant MSBs from re registering, more criminal record checks, action on shelf MSBs, and better visibility into what services each MSB actually provides.
See: BoC RPAA Annual Reporting Reminder For PSPs
This resets the perimeter. MSBs are now seen as critical risk gateways that can no longer just sit at the edge of the system as light infrastructure. This will help strong operators over time because weak competitors will find it harder to hide behind registration status alone.
Banking Fees Get Capped And Challenged
The update links competition policy directly to household financial costs. New NSF fee rules cap charges at $10, down from $45 to $50, with expected consumer savings of more than $600 million annually. Ottawa also intends to consult on prohibiting investment account transfer fees at federally regulated financial institutions. Those fees currently cost Canadians an average of $150 per transfer.
Fee friction has long protected incumbent economics. Lower caps and easier switching reward firms that use better data, real time balance checks, clearer pricing, and lower operating costs. Fintechs should treat this as a product opening opportunity.
Open Banking And Payments Rules Align
The update keeps consumer driven banking as part of Canada's competition agenda. It says amendments to complete the Consumer Driven Banking Act have passed, giving consumers greater control over their finances.
Annex 2 also points to related amendments involving the Retail Payment Activities Act, the Payment Clearing and Settlement Act, the Consumer Driven Banking Act, and the Stablecoin Act as part of Bank of Canada cost recovery consolidation.
See: Bank Of Canada Signals Open Banking Timing Risk
Read this as infrastructure alignment. Canada is preparing the back office of regulation for a more digital financial system.
Retail Investment Access Expands Through Public Markets
The Canada Strong Fund creates another fintech touchpoint. Ottawa describes it as a national investment initiative focused mainly on equity investments in strategic Canadian projects and companies. The government also intends to offer Canadians a widely accessible retail investment product tied to the fund.
Canada wants citizens to participate directly in national growth assets while protecting initial invested capital. If Canadians can invest in strategic projects through a national vehicle, how directly competitive will it be and what role will regulated online investment platforms, exempt market dealers, wealthtech firms, and investor education tools play?
Controls Tighten Across Financial System
Canada is finally becoming more competitive, albeit with a much tighter control layer. Fraud enforcement gets funding and focus. Crypto ATMs face prohibition. MSBs face deeper scrutiny. Banking fees face compression. Open banking remains active. Payments, stablecoins, and data access move into more coordinated oversight. Retail capital access gets a new public investment model.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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