Ron Morrow used the CPA convention to focus on Canada’s gradual tempo in funds modernisation, calling for pressing motion on stablecoin regulation, real-time funds, and business collaboration.
The Financial institution of Canada has delivered one among its strongest calls but for funds modernisation, with Senior Deputy Governor Ron Morrow warning that Canada dangers falling behind worldwide friends except reforms speed up.
Talking on the Chartered Skilled Accountants (CPA) convention on September 18, Morrow admitted that “Canada lags different jurisdictions in terms of funds innovation.” He pointed to the UK, Australia and the European Union as examples of markets the place progress has already reshaped client and enterprise funds.
“Not too long ago, we’ve seen constructive momentum and important engagement from each the private and non-private sectors on these points,” he advised delegates. “However now we have far more work to do and lots of extra alternatives to harness. We will—and we should—construct on this momentum to foster higher innovation and create a extra aggressive funds ecosystem.
“There’s a saying that goes one thing like this, ‘Even should you’re heading in the right direction, you’ll get run over should you sit there.’ So it’s time we stand up off the observe, and get transferring.”
Stablecoins and cross-border funds
Morrow devoted a good portion of his remarks to cryptocurrencies and stablecoins, arguing that whereas their use in Canada stays restricted, international adoption is rising quick.
“Extra not too long ago, there’s rising curiosity in utilizing stablecoins for cross-border funds to make transactions sooner and cheaper. Globally, stablecoin use has been rising lately and now accounts for round US$1 trillion in annual transactions. That’s about US$2.7 billion per day,” he stated.
Stablecoins, pegged to a fiat foreign money such because the US greenback, are designed to beat the volatility of belongings like bitcoin. However with out strong regulation, Morrow cautioned, they might introduce new dangers into the monetary system.
“On the finish of the day, for stablecoins to be seen as cash, they must be as protected and steady because the stability in your checking account,” he stated.
The difficulty has direct relevance for Canadian customers. Morrow famous that sending cash abroad is considerably dearer in Canada than within the US or UK. “For a lot of who immigrated right here from abroad and wish to ship cash house, the price of worldwide cash transfers is considerably greater in Canada than in jurisdictions like the US and United Kingdom,” he stated.
Balancing innovation and security
Canada’s central financial institution isn’t against sooner adoption of latest applied sciences, however Morrow careworn that innovation should include safeguards. He recalled phrases from former Governor Gordon Thiessen, delivered in 1999, that stay related right now: “To discover a stability between the dual aims of effectivity and security has at all times been a problem for governments once they study proposals to vary the regulatory framework for the monetary system.”
Morrow echoed the sentiment: “Let me be clear—that doesn’t imply transferring slowly. However maintaining with innovation and placing acceptable guardrails in place requires a fragile stability.”
He additionally underlined that “innovation can’t come at the price of private or nationwide safety,” warning that belief is the inspiration of Canada’s funds system and should not be undermined.
Increasing position for the central financial institution
Domestically, the Financial institution of Canada has been handed a brand new mandate by means of the Retail Cost Actions Act. Below this framework, it now supervises near 1,500 fee service suppliers (PSPs), tasked with guaranteeing they handle dangers and safeguard client funds.
“The Act supplies a strong framework for shielding customers’ funds. It brings PSPs into the regulatory sphere in order that Canadians can entry cheaper fee choices and a broader array of companies,” Morrow stated. “Furthermore, PSPs overseen by the Financial institution can acquire entry to Canada’s nationwide funds infrastructure, which opens the door to additional competitors and innovation.”
A nationwide registry of PSPs can be revealed and up to date as safety screenings are finalised by the Division of Finance. Morrow warned that each one PSPs should adjust to their new regulatory obligations, including: “And as soon as registered, they might want to meet further reporting necessities.”
Worldwide collaboration
Morrow additionally highlighted Canada’s position in shaping international requirements. The Financial institution is collaborating with the Financial institution for Worldwide Settlements (BIS) by means of its Toronto Innovation Hub, opened in 2024. The hub is specializing in tokenisation and synthetic intelligence for supervisory use circumstances.
“The Financial institution is partaking with the Hub to begin serious about how AI can help our work as a supervisor and a regulator. This can contain studying from different jurisdictions which can be utilizing AI to enhance the effectivity and effectiveness of their supervisory actions,” he defined.
These efforts mirror worldwide debates. The BIS’s 2025 Annual Financial Report sounded the alarm over potential prison misuse of stablecoins, whereas urging regulators to convey official exercise into the formal monetary system. The European Central Financial institution (ECB) has additionally argued that “protected settlement in central financial institution cash” is crucial for monetary stability, and warned of focus dangers as massive expertise companies enter funds.
By aligning with these international initiatives, Morrow positioned Canada as a part of a collective effort to make sure innovation delivers advantages with out compromising resilience.
Actual-time funds and open banking
On house soil, the long-awaited Actual-Time Rail (RTR) is transferring nearer to actuality, with business testing anticipated to start quickly. Morrow additionally cited the passage of the Client-Pushed Banking Act in 2024 as an necessary milestone. Nevertheless, he careworn that legislative adjustments are nonetheless required to convey the framework totally into impact.
Survey knowledge suggests the strain is mounting. Nearly 60% of Canadian enterprise leaders not too long ago stated competitiveness will decline with out additional modernisation, whereas an excellent higher proportion known as for instant motion on open banking, digital id, and real-time funds.
“Clearly, there’s a have to speed up change inside our personal borders,” Morrow stated.
A basis of belief
Regardless of Canada’s relative slowness, Morrow argued the nation enjoys a bonus that shouldn’t be neglected: public confidence.
“Fortuitously, we’re beginning with one benefit: many individuals don’t fear about what occurs behind the scenes once they faucet their debit or bank cards. Safeguarding that belief and confidence can be of the utmost significance as we collectively enterprise into new territories within the funds ecosystem.”
He closed with a rallying name: “Now could be the time to construct on this strong basis, to be formidable and to push for an thrilling future within the funds ecosystem. For our half, the Financial institution will definitely not sit idly on the rails. So let’s get on board the innovation prepare, think about the chances of the place we will go collectively—and go full steam forward.”
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