Canada’s 2025 budget, spearheaded by financial leader Prime Minister Mark Carney, lays out plans to combat cybercrime, promote digital payment innovations, and enhance competition in the financial services sector.
### Open Banking, Stablecoins, and the Real-Time Rail
The budget emphasizes the development of Canada’s core banking systems, expansion of digital remittance options, and the promotion of competition in financial services. The Bank of Canada will oversee open banking payment initiation set to begin in 2027, with an allocation of $25.7 million dedicated to oversight and security over the next five years. Additionally, a consumer-driven banking framework will be introduced to guide payment service providers (PSPs).
Canada has also instituted regulations for fiat-backed stablecoins, allowing for secure usage in digital payments and regulating PSPs that offer these currencies. The upcoming Real-Time Rail (RTR), Canada’s instant payments system, is expected to launch in 2026, enabling 24/7 transactions.
The Retail Payments Activities Act will broaden member eligibility for Payments Canada, allowing over 1,500 new PSPs to join the core payment systems. The budget also includes a review of ATM, Interac (a Canadian interbank payments network), and cross-border remittance fees for greater transparency, alongside proposals to eliminate investment account transaction fees and simplify the process for Canadians seeking to switch primary transaction accounts.
### Embracing Innovation and Fighting Fraud
Another significant aspect of the budget is the establishment of a National Anti-Fraud Strategy to address the rising rates of cybercrime. The budget also announced plans to explore AI technologies for financial services, with further details anticipated.
Minister of Finance and National Revenue François-Philippe Champagne highlighted the current global uncertainty, describing it as a “true generational shift.” He stated, “The challenges are great, but the opportunities for Canada are even greater. This budget must be generational in its ambition and serve to shape our economy and our nation’s future.”