Canada’s crypto realignment: focus on stablecoins and global tax transparency Canada’s crypto realignment: focus on stablecoins and global tax transparency

2025 marked another transformative year for cryptocurrency regulation in Canada, with securities regulators and financial authorities introducing significant guidance, pursuing enforcement action and publishing industry-facing expectations. In a first for the industry in Canada, traditional financial regulators, such as the Office of the Superintendent of Financial Institutions (OSFI), have publicly expressed their support for stablecoins, and the federal government published the draft Stablecoin Act. Taken together, these developments signal the emergence of a federal framework that is poised to reshape the regulatory landscape for stablecoins in Canada.

Over the past few months, OSFI leadership, particularly Superintendent Peter Routledge, has made several public statements and participated in key industry events outlining OSFI’s approach to stablecoins, digital assets and wider financial diversification. These remarks consistently support innovation that operates within a sound regulatory structure.

Canadian tax law and policy, often overlooked and historically somewhat dormant when it comes to the digital asset industry, are expected to have a notable influence on Canadian cryptoasset participants in 2026.

In the year ahead, Canadian participants in the cryptoasset ecosystem, including investment funds, crypto trading platforms, stablecoin issuers and crypto custodians, will face increasing regulatory alignment with traditional finance or “TradFi” standards. This will also come with expanded oversight and reporting obligations as more crypto trading platforms transition to become fully registered investment dealers with the Canadian Investment Regulatory Organization (CIRO).​

Canadian tax implications for cryptoassets

Cryptoasset reporting framework

Canada made headlines in August 2025 when the Department of Finance unveiled draft legislation to implement the Organisation for Economic Co-operation and Development’s (OECD) Crypto-Asset Reporting Framework (CARF). The CARF introduced a sweeping new tax transparency regime for digital assets. If adopted, cryptoasset service providers operating in Canada, including cryptoasset trading platforms and online marketplaces that accept cryptoassets in exchange for goods and services, would face rigorous annual reporting rules. These requirements cover client details and transaction volumes for both crypto-to-crypto and crypto-to-fiat exchanges, along with payments or transfers over US$50,000.​ The Canada Revenue Agency (CRA) has issued guidance on these new rules.

Under the new requirements, covered cryptoasset service providers must perform due diligence to identify reportable users. They must collect comprehensive client and controller information and file it electronically with the CRA annually. An individual user may be required to provide his or her name, address, date of birth, residence and taxpayer identification number. A corporate user would be required to disclose the same personal information for all individuals in control of the corporation. Importantly, anti-avoidance rules have been incorporated into the framework to prevent creative attempts at structuring around the new obligations. The requirements apply to a broad mix of cryptoassets, with only central bank digital currencies and certain prescribed items being excluded.

If adopted, CARF would represent a seismic shift in Canada’s digital asset tax landscape. It would bring local reporting in line with global standards. It would also signal Ottawa’s firm move to bring the crypto industry more fully into the TradFi regulatory mainstream.

Crypto custodial staking

In 2025, the CRA provided much-needed clarity on how it views custodial staking arrangements involving Canadian resident taxpayers and registered cryptoasset trading platforms. The CRA confirmed that, when cryptoassets are held as capital property, since the taxpayer retains beneficial ownership, there is no disposition of cryptoassets when they are deposited with or staked through a compliant platform. Staking rewards, however, must be included in taxable income. Whether these rewards are business or property income depends on the level of activity and facts of each case. Rewards need to be reported in the year they are credited to the taxpayer’s account, or as they are earned, using the accrual method.

Amendments to public cryptoasset fund rules

Rules for public investment funds, such as ETFs and mutual funds, that invest directly or indirectly in cryptoassets were finalized this year [PDF]. As discussed in our Osler Update, in April 2025, Canadian regulators finalized amendments to National Instrument 81-102 – Investment Funds, formally codifying requirements surrounding public cryptoasset funds. The new rules require crypto custodians to store most assets in offline “cold wallet” custody and mandate that custodians acquire annual assurance reports from a public accountant who assesses the design and effectiveness of their controls over cryptoassets. Investment fund managers are expected to conduct thorough due diligence when selecting or approving custodians. In assessing custodians, managers must consider the level of insurance maintained by the custodian as part of that process.

The amendments limit direct investment in cryptoassets to alternative mutual funds and non-redeemable investment funds. Traditional mutual funds may gain some exposure through qualified derivatives, though such investments are subject to percentage caps. Non-fungible tokens (NFTs) are specifically excluded from investment eligibility, reflecting ongoing concerns about their liquidity and valuation.

Notably, the amended rules do not prohibit the use of cryptoassets as underlying collateral or as transferred securities in securities lending and repurchase transactions. In response to public comments, the Canadian Securities Administrators ultimately decided not to impose those specific prohibitions. This approach aligns with the more “TradFi/crypto friendly” direction that regulators appeared to be taking in 2025. This is expected to continue into 2026.

Stablecoins

Global stablecoin activity surged in 2025, with total market capitalization expanding from approximately $200 billion to nearly $300 billion. This surge was driven largely by increased institutional adoption and a growing role for stablecoin in cross-border payments. Daily global stablecoin transaction volumes have now surpassed $30 billion, underscoring stablecoins’ ascendance as a critical element of the crypto world’s infrastructure.

Against this backdrop, the Government of Canada released its 2025 budget [PDF] on November 4, 2025, announcing its intention to introduce legislation to regulate the issuance of fiat-backed stablecoins in Canada. In the weeks that followed, the Government of Canada released draft legislation within the Budget 2025 Implementation Act, No. 1 that would establish Canada’s first national framework for fiat-referenced stablecoins. The draft Stablecoin Act creates a prudential regime requiring fully backed, bankruptcy-remote reserves held with qualified custodians, strict redemption and governance obligations, robust risk-management and data-security programs, and ongoing auditor and legal reporting, all supervised by broad Bank of Canada oversight. The Act’s limited securities carve-out does not displace provincial securities or derivatives laws, which will continue to apply where stablecoins offer yield, replicate investment exposure, or are distributed or traded in ways that trigger securities regulation or fall within existing CSA guidance. Regulations have not yet been published, and many details, including prescribed definitions and technical standards, will likely be confirmed in the future.

Amendments to the Retail Payment Activities Act will simultaneously enable regulation of payment service providers conducting payment functions with “encrypted or tokenized payment instruments”, marking a critical step toward a clear, modernized and secure digital payments ecosystem.

Dealer registration and CIRO membership

In June 2025, CIRO held a roundtable specifically for cryptoasset trading platforms. The meeting was focused on operational resilience and preparedness for crises or disruptions. Discussion included scenario-based exercises with platforms authorized to trade crypto instruments and their key partners. The aim of these exercises was to identify and address operational risks unique to cryptoasset trading, as well as the need to safeguard client interests during periods of stress.​

Shortly thereafter, on June 25, 2025, CIRO published its Enforcement Report detailing enforcement actions against crypto trading platforms and dealer members, emphasizing increased deterrence and harmonization of enforcement practices. The report highlights a rise in cases involving digital assets and showcases the transition toward unified case management and e-discovery systems for Canadian crypto enforcement activity.​

CIRO’s Annual Compliance Report for 2025 evidences that cryptoasset trading platforms are continuing to become CIRO members. The report notes the risk-based approach taken in relation to these platforms and provides guidance for all dealer members on emerging operational, cybersecurity and market risks. This guidance will be particularly important as more platforms become integrated into CIRO’s framework.

Outlook for the future

Looking ahead to 2026, Canadian crypto regulation is poised for another milestone year. Federal legislation for stablecoins is expected to take centre stage, promising the first purpose-built legal framework for cryptoassets in Canada. Enforcement and compliance pressures are likely to intensify as trading platforms transition into CIRO’s full regulatory orbit and as reporting regimes such as CARF take hold and demand new levels of transparency from market participants.

With global stablecoin adoption surging and Canadian authorities seeking to achieve a balance between innovation and safety, the coming year will challenge the industry to adapt swiftly. At the same time, new opportunities for compliant growth will be unlocked. Firms and investors alike should expect a dynamic regulatory landscape, with regulatory clarity and cross-sector collaboration set to define Canada’s crypto future.