CANADA Law and Practice Contributed by: Irbaz Wahab, Cloudhaus Law
1. Overview of Blockchain and Crypto- Assets 1.1 Blockchain 1.1.1 Evolution of Uses of Blockchain Canada’s blockchain market has evolved rapidly over the past 12 months. Canada was an early mover in regulated crypto-asset products, approving the world’s first Bitcoin ETF in February 2021. Since then, the ecosystem has matured through significant mar- ket disruptions, including the FTX collapse and the QuadrigaCX insolvency, and into a period of regula- tory consolidation. Key developments from 2025 to 2026 include the Stablecoin Act (Bill C-15) receiving Royal Assent, CARF amendments to the Income Tax Act, and FINTRAC’s increased enforcement activity. Current use cases include crypto trading platforms, Bitcoin and Ether ETFs, enterprise blockchain, digital identity initiatives in British Columbia, crypto-backed lending, and Bitcoin mining. Canadian companies such as Dapper Labs, Blockstream and Ledn have gained significant international visibility. Looking ahead, the main issues likely to impact blockchain over the next 12 months are the operational rollout of the Stablecoin Act framework, CARF reporting obliga- tions beginning in 2026, and CIRO’s transition away from restricted dealer registration toward full invest- ment dealer membership. A significant recent development is the launch of CADD, Canada’s first CAD-backed stablecoin issued by a regulated financial institution. Tetra Trust Compa- ny, via its agent CAD Digital Inc., received regulatory approval from Alberta Treasury Board and Finance, enabling Canadian dollars to move on blockchain rails under a financial services regulatory framework. Notably, while the Stablecoin Act was passed, it will not come into full effect until 2027, meaning CADD currently operates under a provincial trust company framework pending federal clarity. On intellectual property, Canadian copyright law applies to digital works associated with blockchain-based products in the same manner as other works, though the inter- section of immutable on-chain records and IP rights remains an emerging area without definitive legislative guidance.
1.1.2 Regulatory Sandbox The CSA operates a Regulatory Sandbox that allows fintech firms, including blockchain-based ventures, to obtain time-limited registration or exemptive relief through a process that is generally faster and more flexible than standard applications. It has enabled many crypto-asset businesses to test innovative prod- ucts and services in a controlled manner, including CTPs operating under transitional arrangements while working towards full registration. Participation is not a waiver of regulatory obligations – firms must continue to comply with applicable securities laws and inves- tor protection requirements, and must meet specified terms and conditions including ongoing reporting obligations. In parallel, OSFI has indicated interest in supporting digital innovation among federally regu- lated financial institutions, although it has not formally announced a regulatory sandbox programme to date. 1.1.3 Regulation of Blockchain Technology The general attitude of Canadian regulators is technol- ogy-neutral – they focus on the legal characterisation of the crypto-asset or service being offered rather than the underlying technology. The CSA has repeatedly emphasised investor protection while also supporting innovation through mechanisms like the Regulatory Sandbox. On data privacy, Canada’s federal private-sector privacy regime under PIPEDA applies to blockchain deployments where on-chain data can be linked to an identifiable individual. This creates tension with blockchain’s immutability, particularly around rights to access, correction and deletion. Quebec’s framework under Bill 25 is the most stringent provincial regime, imposing mandatory privacy impact assessments and enhanced consent rules. The federal government pur- sued reform through Bill C-27, which was terminated when Parliament was prorogued in January 2025, leaving the landscape in transition pending new leg- islation following the April 2025 federal election. 1.1.4 Smart Contracts Whether a smart contract is enforceable under Cana- dian law depends largely on its form and specific features. Contract law in Canada is primarily provin- cial, and a smart contract must still satisfy the usual requirements for a binding agreement: offer and
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