The Case for Stablecoins as a Payment Layer

Stablecoin-based payment rails offer a different approach, one where funds move quickly on-chain, at any time, and the fees are measured in cents rather than dollars. For finance teams processing payments at scale, that difference compounds fast.

Stablecoins Are Not Just for Crypto Trading

These payment instruments first captured market attention as a tool for moving capital within decentralized crypto markets (DeFi). They were the stable leg of a trading pair, giving traders somewhere to hold dollar-linked value without exiting to traditional fiat.

Today a growing number of global businesses are using stablecoin infrastructure to pay contractors, settle invoices, and move funds internationally. In most cases the primary draw is process optimization, not exposure to digital assets.

Volume is Growing

In 2025, stablecoin gross on-chain transaction volume hit $33 trillion, surpassing the combined annual throughput of Visa and Mastercard.^[1] That figure spans the full range of on-chain activity including DeFi, trading, and institutional flows. McKinsey and Artemis Analytics estimate actual payment activity at approximately $390 billion annually, a number that doubled year-over-year and reflects real commercial adoption rather than speculative volume.^[2]

Allium’s State of Onchain Finance Q2 2026 report offers a picture of how that volume breaks down by use case. Real-world payments account for 16% of filtered stablecoin transfer volume, while trading and investing still represent the majority at 67%. The report frames this as a market moving from a land grab into steady infrastructure, noting that stablecoin supply has nearly doubled over the past two years while issuance growth has slowed. ^[3]

Payroll gets a lot of attention because it is easy to picture, but it is only one piece of the story. The same economics apply to supplier payments, treasury operations, and transfers between offices in different countries. Any process that involves moving money across borders is a candidate for faster settlement and lower costs.

There are however practical hurdles as the on- and off-ramp experience varies widely. In some markets moving between stablecoins and bank accounts is seamless. In others it is a real friction point. Still, every transaction that clears gives businesses another reason to keep creating the rails.

The Companies Building Canada’s Stablecoin Infrastructure

Getting from concept to live transactions has required more than a policy framework. It takes companies willing to build the issuing platforms, liquidity networks, custody services, interoperability layers, and data tools that a functioning ecosystem actually needs. Several CW3 members have been doing exactly that.

Shakepay

Shakepay grew its reputation by making it simple for Canadians to buy and hold Bitcoin and Ethereum. In May 2025, the company became the first crypto-native business granted Payments Canada membership, giving it direct access to the country’s core payment infrastructure, including the upcoming Real-Time Rail.^[4] The membership also gives Shakepay a seat alongside major banks, allowing its voice to shape how payments evolve in Canada. As a financial backer of the CADD stablecoin consortium, Shakepay is putting capital behind Canadian-dollar settlement infrastructure at the institutional level, a bet that the tools it builds for everyday Canadians will ultimately run on stablecoin rails.^[5]

Tetra Trust

Canada’s first qualified custodian for digital assets, Tetra Trust has gone further than custody alone. In September 2025, Tetra Digital Group raised $10 million from a consortium that includes Wealthsimple, Shakepay, ATB Financial, National Bank of Canada, and Shopify to develop CADD, a Canadian-dollar stablecoin backed 1:1 by domestic reserves.^[5] By December 2025, Tetra had completed the first testnet transfer of a Canadian stablecoin between two financial institutions.^[6] CADD received regulatory approval from Alberta Treasury Board and Finance in May 2026 and is now live on Base, Ethereum, and Tempo.^[6] It is Canada’s first stablecoin issued by a licensed trust company, with reserves held in Canada under full regulatory oversight.

Wealthsimple

Wealthsimple has been one of the more active voices making the case for stablecoin infrastructure in Canada. In partnership with Visa Canada, the company ran a stablecoin settlement pilot demonstrating real-time, seven-day-a-week on-chain settlement for transactions with trading partners. ^[7] Wealthsimple also participated in Tetra’s CADD testnet as one of the two financial institutions to complete Canada’s first inter-institutional stablecoin transfer.^[6] Blair Wiley, Wealthsimple’s Chief Legal Officer, described the CADD partnership as a defining moment for Canada’s digital economy.^[5]

Loon

For stablecoins to work as a payments tool domestically, someone has to issue a coin Canadians can use. Loon does that. Its CADC is a Canadian-dollar-backed stablecoin built for real-time digital payments on blockchain infrastructure that connects directly to traditional financial networks. Where legacy rails introduce delays and friction, CADC settles on-chain without asking businesses to leave the Canadian dollar behind.^[8]

Aquanow

A stablecoin is only as useful as the market around it. Aquanow provides the liquidity layer, processing billions in volume monthly across trading, payments, and wallet solutions for financial institutions operating across Canada and internationally. For institutions and fintechs transacting in digital assets at scale, that underlying infrastructure is not optional.^[8]

Blockscope

The transparency argument for stablecoins only holds if the on-chain data is actually readable. Blockscope makes it so, providing real-time data pipelines, contract analytics, wallet profiling, and alert tools that give developers, institutions, and regulators clear visibility into on-chain activity. In a market operating under Canadian regulatory oversight, that kind of infrastructure is what makes compliance real rather than theoretical.^[8]

What Changes If Canadian Businesses Adopt Stables

The Bank of Canada’s payments modernization agenda, including the Real-Time Rail, starts from a simple premise: removing frictions in the current payment system by supporting real-time payments and broadening participation in payment systems.^[9]

Treasury operations may get simpler when a company can hold and manage liquidity centrally and convert at the moment of payment, rather than managing FX exposures across multiple correspondent banks. For contractors and suppliers in markets where correspondent banking is inefficient, stablecoins allow recipients to receive a greater percentage of remittances.

Beyond cost and speed, stablecoins introduce something traditional rails can not offer. Payment logic can be embedded directly into the transaction. Programmability allows for releasing funds when conditions are met, and routing capital across entities without manual intervention, which results in fewer touchpoints.

There is also a monetary sovereignty question that does not get enough attention. As noted in CW3’s May 2026 submission to the federal government, 98 percent of stablecoins in circulation are denominated in U.S. dollars, representing roughly $315 billion in total market value.^[10] Every Canadian business settling cross-border transactions in USD stablecoins is reinforcing that dominance. A robust CAD-denominated stablecoin ecosystem would give Canadian businesses a domestic alternative, and give Canada a real stake in the infrastructure rather than just paying to use someone else’s.

Yet adoption alone does not guarantee competitiveness. The framework Canadian businesses operate within matters just as much as the technology itself.

Royal Assent Is Not the Finish Line

The Stablecoin Act received Royal Assent in March 2026 but will not come into force until 2027.^[11] Critical matters still to be resolved are flagged in CW3’s 2026 pre-budget submission to the federal government.^[10]

Clarify the Regulatory Taxonomy

Whether stablecoins are payment instruments, securities, or speculative commodities is still an open question under Canadian laws, and that ambiguity creates friction for every business trying to use them. A coherent federal taxonomy treating qualifying stablecoins as payment instruments would simplify tax treatment, streamline compliance, and align Canada with the OECD’s Common Reporting Standards.^[10] Canada’s major trading partners are not waiting. The U.K. has already moved in this direction.

Allow Rewards Programs to Compete

The Stablecoin Act prohibits issuers from paying interest or yield to holders, which is a reasonable constraint for a payment instrument. The problem is that the current wording also catches standard reward programs: cash-back, loyalty points, and usage-based incentives that are common across modern payment networks.^[10] Canadian issuers are already at a structural disadvantage relative to U.S. counterparts. Narrowing the prohibition to cover only direct issuer payments, while allowing third-party reward structures, would level the playing field without compromising the prudential intent.

Build Domestic Custody Capacity

Require reserve assets, cash, and private keys for Canadian-issued stablecoins to be held in Canada, with qualified custodians meeting Canadian capital requirements. This protects investors from jurisdictional risk and reduces concentration concerns from relying on foreign providers.^[10] The work CW3 members are already doing on institutional-grade custody is exactly the kind of infrastructure this recommendation would support and scale.

Establish Mutual Reciprocity With Key Jurisdictions

A Canadian stablecoin framework that does not directionally align with the U.S., U.K., Europe, and Asia is one that Canadian issuers cannot use to compete globally. Equivalency requirements for foreign issuers and mutual reciprocity with key jurisdictions would let Canadian stablecoin companies onboard international customers without navigating conflicting compliance regimes. All while holding foreign issuers entering Canada to common and well understood standards.^[10]

Responsible Innovation

The policy questions around monetary sovereignty and competition are real. Details such as robust digital asset custody, rewards programs, regulatory classification, and international reciprocity are critical. The regulations are what will determine market structure, incentivize adoption, and allow Canadian stablecoin ecosystem participants to scale and compete domestically and globally.

Stablecoins are no longer waiting for a use case. Businesses are already using them to move money, reduce costs, and simplify international payments. The remaining question is whether Canada’s regulatory framework evolves quickly enough to support responsible innovation of critical payment and settlement infrastructure.

For more on this topic: CW3 Submits Recommendations for a Competitive Canadian Stablecoin Framework