Canadian financial institutions are entering a critical phase in the evolution of payments. As stablecoins and AI agents emerge as disruptive forces in global finance, Canadian regulators, banks, and fintechs must prepare for a new era of programmable, cross-border transactions.

  • Stablecoins—digital assets designed to maintain a stable value by being pegged to a reserve asset, such as fiat currency—may have practical applications in cross-border remittances, merchant settlements, corporate treasury operations, and certain institutional settlement processes.
  • AI agents are capable of autonomously facilitating these digital transactions and will significantly reshape traditional banking systems.

The extent to which this intersection between stablecoins and AI agents develops in Canada will influence how the Canadian dollar competes in global digital transactions, how effectively Canadian financial institutions connect to evolving payment systems, and how regulators maintain oversight of autonomous financial transactions.

This article explores how stablecoins and autonomous AI systems could reshape the payments landscape—and the legal, regulatory, and operational considerations that must be addressed to remain competitive in the global economy.

This is the third article in a series by Miller Thomson LLP examining the potential evolution of stablecoins.

What is Canada’s regulatory approach to stablecoins in 2025?

The federal government is developing rules for issuing and trading stablecoins. Once finalized, the Office of the Superintendent of Financial Institutions is expected to oversee compliance for federally regulated institutions. Similar developments are already underway in other jurisdictions, including the United States, the European Union, and Singapore.

Under current Canadian securities laws, payment stablecoins are typically treated as securities or derivatives, subjecting stablecoin issuers to registration, disclosure, and other compliance obligations. The U.S. GENIUS Act takes a different approach: it treats payment stablecoins as payment instruments, requires 1:1 backing in approved liquid assets, and establishes licensing and redemption requirements without classifying them as securities.

This difference in how Canadian and U.S. regulators treat stablecoins could complicate cross-border interoperability, limit Canadian stablecoin issuers’ ability to participate in U.S. markets, and influence how domestic institutions approach stablecoins.

How do Real-Time Rail (RTR) and stablecoins compare for payments?

Real-Time Rail (“RTR”) is a new domestic payment system designed to provide instant, secure settlement within Canada’s regulated financial ecosystem.

In contrast, stablecoins function on global blockchain networks and offer programmable, cross-border transactions. While RTR ensures efficiency, governance centralized oversight, and standardized interoperability for Canadian banks and PSPs, stablecoins excel in use cases such as international remittances, programmable escrow, and decentralized finance integration. Each system has distinct advantages, and Canadian financial institutions should prepare for a future where both coexist and complement one another.

When evaluating the impact of stablecoins and RTR, several key similarities and differences stand out:

  • Speed and finality: Both enable fast settlement. RTR can achieve finality within a governed domestic system, while stablecoin settlement occurs on blockchain networks and may include programmable conditions or AI-triggered actions.
  • Geographic reach: RTR operates solely in Canada, whereas stablecoins can be used internationally, though cross-border use involves navigating evolving foreign regulatory requirements.
  • Fraud and compliance control: RTR offers centralized oversight and coordinated fraud prevention, whereas stablecoins rely on the issuer’s or platform’s controls, which vary widely. If used with AI agents, additional security or screening measures may be applied prior to payment.
  • Interoperability: RTR connects to Canadian banks and PSPs in a standardized way, whereas stablecoins can integrate with many blockchain-based applications globally but face challenges bridging to traditional systems.

In practice, RTR and stablecoins are likely to complement each other. RTR is well-suited for high-volume domestic account-to-account payments, while stablecoins offer advantages for global and programmable transactions. Financial service providers should anticipate and prepare for a time when both systems operate together, competing in terms of popularity and functionality. For Canadian financial institutions, the key challenge will be integrating both technologies in a way that meets client needs while ensuring compliance with legal and regulatory standards.

What are the risks and opportunities of stablecoins for Canadian banks?

Stablecoins offer Canadian banks opportunities to enhance settlement speed, develop programmable financial products, and compete globally in digital finance.

However, risks include reserve volatility, liquidity shifts away from traditional deposits, and systemic exposure if stablecoins are widely adopted.

Competitiveness may depend on how effectively banks integrate stablecoin-based products, such as programmable trade finance payments, faster corporate settlement options, or digital asset custody services.  Those that move early, while proactively addressing compliance and operational risks, may be better positioned in an increasingly automated payments landscape.

What compliance issues do AI-driven stablecoin transactions raise in Canada?

AI-driven stablecoin transactions raise new compliance risks under Canada’s evolving regulatory framework. Institutions must ensure that AI agents initiating payments are properly authorized under account agreements and that transaction monitoring systems meet FINTRAC expectations.

Proposed changes under the Strong Borders Act will significantly increase penalties for non-compliance and introduce enhanced obligations related to customer verification, record-keeping, and reporting, particularly for transactions initiated autonomously by AI systems.

Once the federal framework takes effect, stablecoin issuers will be required to comply with requirements for reserve composition, disclosure, custody, and anti-money laundering and counter-terrorist financing rules under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. These measures coincide with FINTRAC implementing heightened security and oversight standards across the financial services sector.

For example, proposed changes under the Strong Borders Act would significantly raise the stakes for non-compliance by expanding the list of violations that fall into the highest penalty category and increasing potential fines to unprecedented levels in the financial services sector. The legislation will also require reporting entities to maintain registration with FINTRAC and ensure their customer verification, transaction monitoring (including those initiated by AI agents), and record-keeping processes are compliant.

For Canadian banks, additional considerations include due diligence on counterparties issuing or managing stablecoins, ensuring monitoring systems can handle high-volume automated transactions, and updating agreements to address liability for AI-initiated payments. This includes determining responsibility in the event of disputes or legal violations. The Strong Borders Act also proposes restrictions on certain third-party deposits, which could have implications for AI agents executing transactions on behalf of clients. If an AI agent acts on a client’s behalf, the institution may also need to ensure that the agent is authorized under account agreements or payment instructions to avoid being treated as an unauthorized third party.

Cross-border use of Canadian stablecoins may also require compliance with foreign regimes. Where another jurisdiction’s regulations, such as the U.S. GENIUS Act, impose licensing, reserve, or reporting standards on foreign stablecoin issuers, Canadian participants would need to meet those requirements to operate in that market. Banks will also need to assess how differing legal definitions of “stablecoin” in other countries impact their ability to offer related services to offshore clients.

How should Canadian financial institutions prepare for AI-enabled payments?

While the combination of AI agents and stablecoins has yet to gain widespread traction in Canada, the technology is already available, and once regulations are in place, adoption is likely to accelerate.

The success of a Canadian-dollar stablecoin will depend on its competitiveness with foreign-issued alternatives in terms of cost, interoperability, and regulatory clarity. Decisions made over the next year or two will play a crucial role in shaping Canada’s position within the global landscape of intelligent, programmable payments.

Financial institutions need to determine how they intend to participate as this new framework takes shape. AI agents capable of initiating stablecoin transactions may change how companies manage liquidity, execute contracts, and settle obligations.

This creates opportunities for new products, but also pressures banks to implement compliance, risk, and operational systems suited to a new category of programmable, cross-border transactions.

Institutions that invest now in understanding the technology, regulatory landscape, and potential partnerships will be better positioned in a payments market that is becoming faster, more global, and increasingly automated.

Stay ahead of Canada’s digital payment transformation

Miller Thomson’s multidisciplinary team, spanning Technology, AI, and Banking and Financial Services, advises financial institutions, fintechs, and corporate clients on the legal, compliance, and operational challenges tied to stablecoins, autonomous agents, and evolving payment systems. Contact us to discuss how we can support your innovation roadmap.

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