Canada is moving toward a formal regime for stablecoins (fiat‑referenced cryptoassets), with a draft framework released and Bill C‑15 introduced at first reading as the legislative backbone.

For mortgage lenders and other home finance providers, this is not just a niche crypto development – it will shape how borrowers fund, pay, provide collateral and interact with lenders in the coming years.

🇨🇦 The Draft Stablecoin Regime – At a Glance

The proposed framework would regulate certain fiat‑referenced cryptoassets as a distinct product class, focusing on:

• Governance & Authorization of issuers and key intermediaries
• Reserves, custody and segregation of assets backing stablecoins
• Redemption rights and convertibility for holders
• Disclosure and transparency, including independent reserve attestations

Bill C‑15 would amend core federal financial sector statutes to give regulators the tools to:

• Designate and oversee stablecoin arrangements
• Set prudential, conduct and reporting requirements
• Align stablecoins with broader payments, AML/CTF and consumer protection objectives

🏦 Why This Matters for Mortgage Lenders

Even though mortgage lenders won’t typically be stablecoin issuers, the regime will affect core lending operations, risk management and product design.

1. Source of Funds for Down Payments and Equity

• More borrowers will present crypto‑ and stablecoin‑derived wealth as the source of down payments, equity injections and closing funds.
• A regulated stablecoin regime will shape what is considered acceptable, verifiable and lower‑risk from a KYC, AML and source‑of‑funds perspective.
• Lenders should revisit underwriting guidelines to specify how stablecoin‑derived funds are documented, seasoned and assessed for affordability and fraud risk.

2. Payment Flows: Advances, Repayments and Fees

• As stablecoins become more embedded in payment rails, clients will increasingly ask whether they can:
  • Receive disbursements into wallets or stablecoin‑linked accounts
  • Make mortgage payments, lump-sum prepayments or fees using stablecoins
• The regime is likely to create a practical divide between “in‑scope, compliant” stablecoins and others, prompting lenders to:
  • Define which stablecoins (if any) are accepted
  • Establish conversion, FX, fee and cut‑off time rules where stablecoins are used
  • Update terms and conditions to clarify payment finality and dispute processes

3. Collateral and Security Over Digital Assets

• As stablecoins and tokenized assets become more mainstream, lenders may be asked to:
  • Take security over stablecoin holdings or wallets as supplemental collateral
  • Recognize stablecoin holdings as part of a borrower’s net worth and liquidity profile
• The framework will influence when stablecoins can be treated as cash‑like collateral, and how security interests are:
  • Documented in standard security agreements
  • Perfected and enforced (including control over wallets and custody arrangements)
• Lenders should review credit risk and collateral eligibility policies to decide if, when and how stablecoins can form part of the security package.

4. KYC, AML/CTF and Transaction Monitoring

• A clearer regulatory label for certain stablecoins will feed directly into onboarding and ongoing monitoring:
  • Distinguishing regulated vs. unregulated tokens in CDD and EDD
  • Adjusting red flag indicators for large inflows or outflows involving stablecoins
  • Enhancing staff training on how to interpret and question crypto‑to‑fiat conversions
• Expect closer alignment between the stablecoin regime and federal AML expectations, including documentation standards for crypto‑sourced funds.

5. Partnerships, Fintech Channels and Embedded Finance

• Many mortgage lenders already work with brokers, fintechs and digital platforms that experiment with stablecoins in:
  • Client acquisition and onboarding journeys
  • Wallets, super‑apps and alternative payment channels
• The regime will heighten expectations around third‑party risk management, requiring lenders to:
  • Diligence how partners integrate and explain stablecoins to borrowers
  • Align marketing, disclosures and complaint‑handling where stablecoins play a role in the borrowing or repayment journey.

✅ Practical Next Steps for Mortgage Lenders

To get ahead of the new regime, mortgage lenders should:

1. Map Exposure
   • Identify where stablecoins and broader crypto already intersect with your business:
     • Source of down payments / equity
     • Payment methods and settlement channels
     • Collateral and security interests
     • Treasury, liquidity and funding operations
2. Update Policies and Playbooks
   • Refresh KYC/AML, source‑of‑funds, collateral and collections policies to address regulated stablecoins specifically.
   • Clarify acceptance criteria and treatment for different types of digital assets.
3. Review Documentation and Client Communications
   • Consider whether mortgage terms, security documents and disclosure packages need to address stablecoin‑related payments, collateral or funding sources.
   • Ensure borrowers receive clear, consistent messaging about what is – and is not – accepted, and on what terms.
4. Engage in the Policy Dialogue
   • Participate in consultations on the draft framework and Bill C‑15 through industry bodies or directly.
   • Bring a mortgage‑specific lens to questions of payment rails, collateral treatment and consumer communications. Canada is signalling that stablecoins are here to stay – but under a disciplined, supervised and well‑capitalized framework. For mortgage lenders, this is the right time to stress‑test your policies, documentation and digital strategy for a future where clients routinely interact through regulated stablecoins as well as traditional fiat.