Canada's budget would require banks to issue stablecoins through separate subsidiaries, bringing them under the Stablecoin Act.

Canada's Nov. 5 budget proposes requiring banks and other federally regulated financial institutions that issue stablecoins to do so through separate subsidiaries, bringing those issuers under the Stablecoin Act alongside nonbank issuers.

The proposed subsidiaries would be non-financial institutions regulated under the Act. Budget 2026 also proposes extending the framework to foreign financial institutions that are not prudentially regulated in Canada, with consistent treatment across issuers as its stated goal.

A stablecoin issued by a bank-owned company would still fall within a framework that separates covered tokens from publicly insured deposits.

The legislative annex proposes amending the Bank Act, Trust and Loan Companies Act, and Insurance Companies Act to prohibit federally regulated financial institutions from issuing stablecoins directly.

The existing Stablecoin Act excludes financial-institution issuers, subject to regulations. Routing issuance through a non-financial-institution subsidiary would bring that issuing entity within the stablecoin framework.

The budget would bring bank subsidiaries and certain foreign financial institutions under the Stablecoin Act. These are proposed changes; the operating framework awaits commencement.

Bank ownership would not turn a covered stablecoin into a publicly insured deposit.

Budget intentions require legislation. Justice Canada's consolidation current to October 19 marks operating provisions not in force. Regulatory terms and discretionary exemptions matter; the diagram is not a finding about any named issuer.

Source-backed qualitative relationship diagram. Arrows show proposed issuing routes or scope, not fund transfers or quantitative scale. No forecasts or calculations.

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