Experts: CAD token market growth hinges on clear rules

Canada's ability to capture a meaningful share of tokenised capital markets depends on regulatory clarity, institutional adoption, and robust blockchain infrastructure, according to experts at the Ontario Web3 Digital Asset Summit in Toronto last week.

The roundtable brought together Melissa Taylor, Senior Legal Counsel in the Corporate Finance branch at the Ontario Securities Commission; Miro Kuratczyk, Senior Solutions Engineer at Chainlink Labs; and James Emerson, Senior Manager, Digital Assets CoE at KPMG Canada.

Institutional Adoption is Key

Emerson pointed to a broader trend among financial institutions moving beyond pilot programs to operational deployments of tokenised assets. He described 2025 as an "inflection year" in the digital asset space, with institutions increasingly exploring use cases for tokenised deposits, stablecoins, and blockchain-based payment and settlement systems.

While his division speaks with clients, they note the need to move from proof of concept to operational use cases. Emerson said the GENIUS Act in the U.S. really helped these companies, in a watershed moment, to launch in that market.

He noted that while other jurisdictions, such as the U.S. and Europe, are making rapid progress, Canada's regulatory environment remains cautious, and institutions are looking for clear rules before committing significant resources.

"We need to work more closely with the regulators, and we also need our politicians and our government to actively talk about this industry and also show their support, because that's what we're seeing a lot of in the US, and that's what's driving innovation forward there," he said. "All we have is a proposed Stablecoin Act."

In November, the Canadian government completed a first reading of Bill C-15, which includes the proposed Stablecoin Act.

As the bill stands, the government would regulate stablecoin issuers, imposing duties on persons who create stablecoins and make them available for purchase, directly or indirectly, by persons in Canada.

The Bank of Canada will be directed to maintain a public registry of stablecoin issuers. The Act also addresses, among other things, the redemption of stablecoins by issuers and the asset reserves they must maintain to fulfil their redemption obligations. If the minister overseeing operations deems a stablecoin purchase either unfunded or a threat to national security, they may direct the bank to cancel the purchase application.

A final house reading was completed last month. It currently awaits a third and final reading by the Senate.

The OSC and Regulatory Engagement

Taylor stressed that proactive engagement from regulators is critical to prevent companies from leaving Canada due to perceived regulatory friction.

"If there is a securities regulation issue or friction that is causing someone to leave or think about leaving, we absolutely want to hear from industry about that," she said.

Taylor noted that any confusion about tokenised securities is often more about implementation than the rules themselves.

"Securities laws are technology neutral," she said. "It doesn't matter whether you issue a certificate on paper, tokenise it digitally, or represent it in any other digital form. If it's a security, it's a security."

Taylor highlighted the OSC's initiatives to foster industry dialogue, including Project Tokenisation, launched through the Canadian Securities Administrators Collaboratory. The project is designed to help market participants navigate the tokenisation of assets within existing securities frameworks. The team is engaging with market participants, technology providers, and investor representatives to build a shared understanding of tokenisation and its implications for Canadian markets.

Hybrid Blockchain Infrastructure

From a technology perspective, Kuratczyk highlighted the growing importance of hybrid blockchain models that combine private and public networks to meet institutional requirements.

"What we're seeing emerge is a hybrid model of private chains and public chains," Kuratczyk said. "Chainlink is both an oracle, compliance and interoperability solution...Basically, what oracles do is they bridge off chain data on chain. This is what enables bringing price data on chain and on the interoperability side, this is how we bridge assets and messages cross chain."

Kuratczyk also noted that Canada's relatively unified banking system is an advantage compared to more fragmented markets like the U.S.

"If we can find unity across banks on how to bring assets on-chain, tokenised bonds, repo trading, or Canadian stablecoins, that could attract both domestic and international capital."

Challenges and Opportunities

Speakers acknowledged that Canada has lost some momentum in digital assets compared to other jurisdictions. Early innovation in Canada's tech hubs gave way to talent and capital flowing south, attracted by more permissive regulatory environments and faster-moving infrastructure.

Kuratczyk and Emerson emphasised that infrastructure and institutional buy-in are critical to moving from pilot programs to scalable, production-ready solutions.

Kuratczyk pointed to the potential for Canadian pension funds, the Toronto Stock Exchange, and major banks to create the scale and legitimacy needed to drive adoption. Emerson added that demonstrating a successful pathway from proof of concept to production will create a positive "flywheel" effect for the broader ecosystem.