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OSFI Drafting New Framework to Regulate Stablecoin Issuers
Crypto Regulation | June 30, 2025
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Federal Regulators Creating Rules for Stablecoins in Canada
On June 26, The Logic and Morningstar reported that Canada’s federal government is drafting a new legislative framework for stablecoin issuers. The Department of Finance is leading the effort, with support from the Office of the Superintendent of Financial Institutions (OSFI) and the Bank of Canada.
See: Key Findings from 2025 Advanced Payments and Fintech Survey
The framework is expected to define which companies can issue stablecoins, what assets they must hold in reserve, and how redemption and consumer protections will work. While OSFI already issued guidelines in early 2025 for how banks and insurers must treat crypto assets like stablecoins on their balance sheets, the new law will apply directly to stablecoin creators for the first time.
Key Takeaways
1. Stablecoin legislation is in active development
On June 26, 2025, OSFI Superintendent Peter Routledge confirmed that the Department of Finance is drafting stablecoin legislation.
Peter Routledge, Superintendent of Financial Institutions via The Logic article:
“We are preparing for the day that there is a legislative framework that gives us the authority to regulate and supervise that particular innovation in a constructive way.”
2. New law will likely include licensing and redemption rules
Although the draft bill hasn't yet been released, Finance Canada has signalled that the framework may include:
- Registration or licensing for Canadian dollar stablecoin issuers
- Reserve asset standards, such as cash or high-quality securities
- Clear redemption terms for holders
- Disclosure and audit requirements
See: U.S. Passes First Stablecoin Law with GENIUS Act
This would align Canada with international approaches, such as the EU’s MiCA regulation and the global Financial Stability Board’s recommendations.
3. QCAD offers an early Canadian example of proactive alignment
QCAD is a Canadian dollar stablecoin backed by reserves held in Canadian financial institutions, issued by Stablecorp. It's governed by a legal trust structure and verified through third-party attestations. On June 16, 2025, Stablecorp filed a preliminary prospectus with the Ontario Securities Commission under the CSA’s interim framework for fiat-referenced crypto assets and per the release, "[QCAD] will bring the first regulated Canadian stablecoin to market", and is a good example of Canadian issuers proactively taking steps to comply with rules the upcoming law may apply.
4. OSFI guidance for banks and insurers is separate but aligned
In February 2025, OSFI released the Capital and Liquidity Treatment of Crypto-asset Exposures for Banks guideline (after holding consultations), which applies only to federally regulated financial institutions. It defines how banks and insurers must treat stablecoins and other crypto assets in terms of capital and liquidity requirements.
See: BIS Stablecoin Warning Meets US Policy Momentum
- OSFI’s guideline classifies stablecoins that meet strict requirements as Group 1b assets
- USDC is currently the only stablecoin OSFI formally recognizes as meeting those criteria
- Other stablecoins like QCAD may qualify later once formally reviewed
5. The new law will fill a regulatory gap for non-bank issuers
While OSFI can guide how stablecoins are handled by banks and insurers, it does not currently have legal authority to supervise stablecoin issuers directly. The new legislative framework is expected to close that gap. This will ensure that any company issuing a Canadian dollar stablecoin is subject to consistent national rules, regardless of whether they are a financial institution or a fintech startup.
Outlook
Stablecoins are gaining traction in Canada and globally, but the companies that issue them operate in a legal grey area. The new federal legislative framework will give regulators the tools to oversee how stablecoins are issued, backed, and redeemed. This will help protect consumers, reduce financial risk, and give fintechs a clear path towards compliance. For stablecoin projects like QCAD, the upcoming rules will provide an opportunity to become fully recognized under Canadian law.
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