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The Bank of Canada will have oversight for the open banking payment initiation that will kickoff in 2027, for which $25.7 million has been allocated for oversight and security over the next five years. The government will also be releasing a consumer-driven banking framework to provide further guidance to payment service providers (PSPs).

Notably, Canada introduced rules for fiat-backed stablecoins allowing them to be used securely for digital payments and regulating PSPs that provide stablecoins.

The Real-Time Rail (RTR), Canada’s incoming instant payments system is set to launch in 2026, designed to enable 24/7 transactions.

The Retail Payments Activities Act has expanded member eligibility for Payments Canada to allow more companies to participate in Canadian core payment systems. Over 1,500 new PSPs are expected to join.

The budget also included a review of ATM, Interac (a Canadian interbank payments network), and cross-border remittance fees to enhance transparency, and proposed for investment account transaction fees to be eliminated. The process of switching primary transaction accounts for Canadian institutions will also be simplified for those looking to make a change.

From: Canada’s 2025 budget plan includes new stablecoin rules, Real-Time Rail launch.

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The way we solve these tradeoffs in TradFi is with centralized organizations protecting your data.
KYC isn’t just collecting data.
The CIP (Customer Identification Process) has been largley solved in existing crypto. Custodial and self-custodial wallets KYC their users whenever they on-ramp/off-ramp or make a transaction above $1,000. 
However, KYC also includes monitoring transactions, customer due diligence, and a whole swathe of processes that follow. Banks have the highest bar for getting this right and receive the biggest consequences if not.
The crypto industry solved this in a few ways
Centralized exchanges and wallets KYC their customers
They use services like Note Bene to ensure travel rule compliance if a transaction goes above $1,000
They use blockchain specific transaction monitoring tools like Elliptic or TRM Labs.
But banks also need to ensure commercial and consumer privacy on those networks when it comes to deposits.
There are many possible approaches here.
They can build their own L2s (like a VPN) where they can see the privacy / KYC tradeoffs, and then allow users to swap their deposit token and bridge to another network.
Their deposit token smart contracts can restrict which wallets get to use the token to known, KYC’d entities.
They can use Zero Knowledge Proofs or other privacy-preserving cryptography to not reveal sensitive PII or data.
Ultimately, this is a solvable problem. 
The market just hasn’t agreed precisely how to solve it yet.

From: Every Bank Should Tokenize Deposits.

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Stablecoins are an existing, low-cost, international payments rail with a slew of new revenue opportunities. Every F500, merchant, wallet, fintech company and tech platform is actively trying to adopt them from corporate treasury to consumer remittances. 
Banks have some superpowers.
They have priority access to true settlement (FedWire). This is why every big stablecoin platform is applying for a charter. But this will take time, and won’t be for everyone.
Banks can lend to the lenders. Savvy banks have begun doing loans for solar, or taking part in private credit tranches. Onchain lending could represent the next massive opportunity (That’s an entire Rant in itself).
The vast major of consumers want bank brands not crypto. Regional and domestic banks already do buy/sell/hold. Stablecoins as they normalize would be a natural extension.

From: The Stablecoin Opportunity That Banks Are Missing.

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In Noelle Acheson’s (excellent) American Banker piece on the difference between tokenisaed deposits (not that interesting) and deposit tokens (very interesting), she summarises the distinction between the two with typical assurance: Tokenized deposits represent the digitalization of banking relationships whereas deposit tokens are closer to an evolution in money movement. Generally speaking, the crypto sector often jumbles them together but it is time players more clearly distinguished between the two as, for example, JP Morgan has done. It clearly labels its new JPMD token that went live on the public layer-2 blockchain Base as a “deposit token,” while its Kinexys Digital Payments network offers what they call “blockchain deposit accounts”: tokenized deposits that enable programmability and the 24/7 transfer of value between JPMorgan clients using its own Onyx blockchain.

JPMD is not a stablecoin. It can only be transferred into “whitelisted” wallets, whether they are JP Morgan institution clients or not.

Andreessen Horowitz, an investor in Spruce Systems and World amongst others, has responded to a US Treasury Department call for feedback around digital assets by highlighthing the role of decentralised identity and pivacy-preserving technologies such a zero-knowledge proofs (ZKPs). (I often highlight these too, but no-one listens to me, least of all the US Treasury.)

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The OpenID Foundation (OIDF) has released two papers on standardizing the use of mobile driver’s licenses (mDL) as verifiable credentials in the U.S., where multiple state authorities issue mDLs in different digital wallets.

The first paper, titled mDL Metadata Requirements to support Know Your Customer (KYC),  introduces a standardized metadata framework to help financial institutions meet regulatory compliance requirements, such as CIP and KYC, by providing machine-readable trust signals.

The second paper, Customer Identification Program (CIP) compliance and OIDF Extended KYC Considerations, builds on the first one, providing an implementation roadmap extending the metadata framework to regulatory and privacy requirements from different regulatory frameworks.

From: OpenID Foundation publishes papers on standardizing US mDLs as verifiable credentials | Biometric Update.

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G20 reportxxx

How bad is it?
Stunningly bad is the only answer I can give.

The Roadmap targets aim to have 75% of all payments, including wholesale, retail, and remittances, credited within one hour, with the remaining 25% within 24 hours.

For wholesale transactions, the FSB shows that there is a long way to go in speeding payment time:

➢54.6% of payments were credited within one hour of payment initiation, a negligible increase from 53.8% in 2023 and far off the 75% target.

Unsurprisingly, retail payments are even more shocking:

➢35.4% of cross-border retail payment services are received within one hour of initiation, a marginal change from 34.2 in 2023 and well off the 75% target

➢67.3% are received within one business day, DECLINING from 74% in 2023!

As to price, the Roadmap’s target for remittances is to reduce the global average cost of remittances to less than 1% by 2027, with no corridors exceeding 3%

Here again, costs fail by large amounts:

➢30% of P2P remittance corridors have costs higher than 3% up from 28% in 2023

➢18% of overall global P2P, B2B, B2P, P2P remittances had costs higher than 3% down from 23%.

From: G20’s Dream of 1-hour Payments and 3% Remittances Falters.

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Set to launch in the first half of 2026, the firm’s US Dollar Payment Token (USDPT) will be built on Solana and issued by Anchorage Digital Bank

From: Western Union to launch stablecoin.

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Felix Goltz, research head at Scientific Beta and co-author of the report, said one of the claims made for AI models was that they could produce outperformance compared with benchmarks of as much as 40 per cent a year.

But after taking account of these unrealistic biases, the outperformance was “more like 3 per cent a year”, he said.

From: AI stockpicking skills greatly exaggerated, fund managers told.

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The government is also exploring more ways to verify the identity of business owners. The London-based Centre for Finance, Innovation and Technology (CFIT) has been developing a prototype of the Digital Company ID. Dozens of organizations have joined the effort, including biometric technology providers such as Daon, Yoti and OneID.
Research commissioned by CFIT has found that more than 80 percent of small and medium-sized enterprises in the UK would not mind paying for a Digital Company ID.

From: Mandatory identity verification for UK companies goes live | Biometric Update.

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