{"id":267698,"date":"2025-11-07T12:07:12","date_gmt":"2025-11-07T12:07:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/267698\/"},"modified":"2025-11-07T12:07:12","modified_gmt":"2025-11-07T12:07:12","slug":"bank-of-canada-says-it-can-handle-open-banking-and-stablecoin-work-despite-budget-cuts","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/267698\/","title":{"rendered":"Bank of Canada says it can handle open banking and stablecoin work despite budget cuts"},"content":{"rendered":"

Ottawa is confident the Bank of Canada can take on new oversight roles for open banking and stablecoins even as it prepares to cut about 10 per cent of its staff, Finance Minister Fran\u00e7ois-Philippe Champagne said in Toronto on Thursday.<\/p>\n

Speaking to reporters at an event following Tuesday\u2019s release of the federal budget, Champagne said the government consulted with the central bank to make sure it had the capacity to take on the new responsibilities. The Department of Finance chose to give the Bank of Canada supervision because Canadians trust it, he said.<\/p>\n

Talking Points<\/p>\n

The day after the Liberal government tabled the budget announcing the Bank of Canada\u2019s new oversight of open banking and stablecoins, the central bank confirmed it has agreed to trim its spending by 15 per cent from 2026 to 2028 and cut 10 per cent of its workforce
\nThe central bank must now manage hefty new responsibilities\u2014affecting competition, financial system safety and monetary sovereignty\u2014with fewer resources than it had before<\/p>\n

\u201cIf you want to have adoption and innovation, you need to build trust,\u201d Champagne said. \u201cThe Bank of Canada is the most trusted institution in our country when it comes to the stability of the financial sector.\u201d<\/p>\n

The day after the government tabled the budget announcing the Bank of Canada\u2019s expanded mandate, the central bank confirmed<\/a> it has agreed to trim its spending by 15 per cent from 2026 to 2028 and cut 10 per cent of its workforce, around 230 jobs, by June. That means the institution will have to figure out how to manage expanded responsibilities over areas that affect competition, financial system safety and monetary sovereignty while working with fewer resources than it had before.<\/p>\n

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The federal Liberals announced<\/a> in the budget that they will shift oversight of open banking, a forthcoming framework requiring financial-services businesses to share data at a customer\u2019s request to power payments and services, away from the Financial Consumer Agency of Canada (FCAC), a relatively little-known federal consumer watchdog. The budget also put the Bank of Canada in charge of anticipated new legislation for stablecoins, crypto assets pegged to the value of the dollar, that are increasingly used<\/a> for everyday payments since the U.S. introduced its own legislation regulating them in July.<\/p>\n

Notwithstanding the impending spending cuts, the budget does provide some sources of funding to the Bank of Canada for its new responsibilities. Ottawa will let the Bank of Canada keep $19.3 million in revenue over two years that it would have normally remitted to the federal government to fund its new oversight of open banking, and an additional $10 million to fund its oversight of stablecoins. The 2024 Fall Economic Statement had allocated $36.9 million to the FCAC for open banking, which will no longer be spent, the budget said.\u00a0<\/p>\n

In an email, the Bank of Canada\u2019s executive director of payments, supervision and oversight Ron Morrow said \u201cit\u2019s too early to say\u201d what the funding and staffing requirements of its new functions will be. He said the central bank\u2019s experience in setting up regulations around payment companies, which announced<\/a> its first batch of registrants in October, will be helpful. \u201cThe Bank of Canada is well-placed to take on these mandates,\u201d he said.<\/p>\n

The move gives the central bank more control over the many non-bank companies that increasingly power online payments and other financial services. The Bank of Canada also took on supervision of Interac\u2019s e-Transfer<\/a> system in 2020 and oversees<\/a> Payments Canada\u2019s yet-to-launch instant payments system.<\/p>\n

All these systems could create friction between startups and the legacy financial players they seek to disrupt\u2014a potential minefield<\/a> for an institution that\u2019s supposed to be staunchly independent from politics. Morrow and Champagne didn\u2019t directly address questions about how the Bank of Canada will navigate these tensions while remaining politically neutral.<\/p>\n

Geoff White, former executive director of the Public Interest Advocacy Centre, a consumer protection non-profit, said he\u2019s also concerned that the Bank of Canada lacks the FCAC\u2019s consumer protection mandate. It\u2019s not clear where consumers are supposed to take complaints about stablecoins, open banking or payment companies, he said. \u201cIf FCAC is getting money pulled back to do work in this area, and the Bank of Canada is saying, \u2018Well, we don\u2019t really do consumer protection,\u2019 what\u2019s going to happen?\u201d<\/p>\n

Asked whether consumers will have sufficient protection with open banking under the Bank of Canada\u2019s jurisdiction, the FCAC deferred to the Department of Finance. Deputy spokesperson Marie-France Faucher said the FCAC \u201cwill maintain its mandate for financial literacy, including helping Canadians understand how to safely share their financial data\u201d under open banking.<\/p>\n

Parna Sabet-Stephenson, who leads the financial services and technology teams at Gowling WLG, said in an email that the FCAC will still be well-positioned to protect consumers and drive education and awareness of open banking. She said her clients are happy to see the Bank of Canada bring more fintech regulation under its umbrella, because they\u2019ve had positive experiences working with the institution.\u00a0<\/p>\n

Working with a single organization will also cut red tape, she said. For example, companies applying to use open banking and the Real-Time Rail will only have to undergo one national security review. \u201cThis is a positive and timely step forward,\u201d she said. <\/p>\n","protected":false},"excerpt":{"rendered":"Ottawa is confident the Bank of Canada can take on new oversight roles for open banking and stablecoins…\n","protected":false},"author":2,"featured_media":267699,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[9437,45,49,48,37770,46,121472,11119,84062,2659,44],"class_list":["post-267698","post","type-post","status-publish","format-standard","has-post-thumbnail","category-canada","tag-banking","tag-business","tag-ca","tag-canada","tag-crypto","tag-economy","tag-federal-budget-2025","tag-fintech","tag-francois-philippe-champagne","tag-mark-carney","tag-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/267698","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=267698"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/267698\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/267699"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=267698"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=267698"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=267698"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}