Ron Morrow used the CPA conference to highlight Canada’s slow pace in payments modernisation, calling for urgent action on stablecoin regulation, real-time payments, and industry collaboration.
The Bank of Canada has delivered one of its strongest calls yet for payments modernisation, with Senior Deputy Governor Ron Morrow warning that Canada risks falling behind international peers unless reforms accelerate.
Speaking at the Chartered Professional Accountants (CPA) conference on September 18, Morrow admitted that “Canada lags other jurisdictions when it comes to payments innovation.” He pointed to the UK, Australia and the European Union as examples of markets where progress has already reshaped consumer and business payments.
“Recently, we’ve seen positive momentum and significant engagement from both the public and private sectors on these issues,” he told delegates. “But we have much more work to do and many more opportunities to harness. We can—and we must—build on this momentum to foster greater innovation and create a more competitive payments ecosystem.
“There’s a saying that goes something like this, ‘Even if you’re on the right track, you’ll get run over if you sit there.’ So it’s time we get up off the track, and get moving.”
Stablecoins and cross-border payments
Morrow dedicated a significant portion of his remarks to cryptocurrencies and stablecoins, arguing that while their use in Canada remains limited, global adoption is rising fast.
“More recently, there is growing interest in using stablecoins for cross-border payments to make transactions faster and cheaper. Globally, stablecoin use has been rising in recent years and now accounts for around US$1 trillion in annual transactions. That’s about US$2.7 billion per day,” he said.
Stablecoins, pegged to a fiat currency such as the US dollar, are designed to overcome the volatility of assets like bitcoin. But without robust regulation, Morrow cautioned, they could introduce new risks into the financial system.
“At the end of the day, for stablecoins to be seen as money, they need to be as safe and stable as the balance in your bank account,” he said.
The issue has direct relevance for Canadian consumers. Morrow noted that sending money overseas is significantly more expensive in Canada than in the US or UK. “For many who immigrated here from overseas and want to send money home, the cost of international money transfers is significantly higher in Canada than in jurisdictions like the United States and United Kingdom,” he said.
Balancing innovation and safety
Canada’s central bank is not opposed to faster adoption of new technologies, but Morrow stressed that innovation must come with safeguards. He recalled words from former Governor Gordon Thiessen, delivered in 1999, that remain relevant today: “To find a balance between the twin objectives of efficiency and safety has always been a challenge for governments when they examine proposals to change the regulatory framework for the financial system.”
Morrow echoed the sentiment: “Let me be clear—that doesn’t mean moving slowly. But keeping up with innovation and putting appropriate guardrails in place requires a delicate balance.”
He also underlined that “innovation cannot come at the cost of personal or national security,” warning that trust is the foundation of Canada’s payments system and must not be undermined.
Expanding role for the central bank
Domestically, the Bank of Canada has been handed a new mandate through the Retail Payment Activities Act. Under this framework, it now supervises close to 1,500 payment service providers (PSPs), tasked with ensuring they manage risks and safeguard consumer funds.
“The Act provides a solid framework for protecting consumers’ funds. It brings PSPs into the regulatory sphere so that Canadians can access cheaper payment options and a broader array of services,” Morrow said. “Moreover, PSPs overseen by the Bank can gain access to Canada’s national payments infrastructure, which opens the door to further competition and innovation.”
A national registry of PSPs will be published and updated as security screenings are finalised by the Department of Finance. Morrow warned that all PSPs must comply with their new regulatory obligations, adding: “And once registered, they will need to meet additional reporting requirements.”
International collaboration
Morrow also highlighted Canada’s role in shaping global standards. The Bank is collaborating with the Bank for International Settlements (BIS) through its Toronto Innovation Hub, opened in 2024. The hub is focusing on tokenisation and artificial intelligence for supervisory use cases.
“The Bank is engaging with the Hub to start thinking about how AI can support our work as a supervisor and a regulator. This will involve learning from other jurisdictions that are using AI to improve the efficiency and effectiveness of their supervisory activities,” he explained.
These efforts mirror international debates. The BIS’s 2025 Annual Economic Report sounded the alarm over potential criminal misuse of stablecoins, while urging regulators to bring legitimate activity into the formal financial system. The European Central Bank (ECB) has also argued that “safe settlement in central bank money” is essential for financial stability, and warned of concentration risks as large technology firms enter payments.
By aligning with these global initiatives, Morrow positioned Canada as part of a collective effort to ensure innovation delivers benefits without compromising resilience.
Real-time payments and open banking
On home soil, the long-awaited Real-Time Rail (RTR) is moving closer to reality, with industry testing expected to begin soon. Morrow also cited the passage of the Consumer-Driven Banking Act in 2024 as an important milestone. However, he stressed that legislative changes are still required to bring the framework fully into effect.
Survey data suggests the pressure is mounting. Almost 60% of Canadian business leaders recently said competitiveness will decline without further modernisation, while an even greater proportion called for immediate action on open banking, digital identity, and real-time payments.
“Clearly, there is a need to accelerate change within our own borders,” Morrow said.
A foundation of trust
Despite Canada’s relative slowness, Morrow argued the country enjoys an advantage that should not be overlooked: public confidence.
“Fortunately, we’re starting with one advantage: many people don’t worry about what happens behind the scenes when they tap their debit or credit cards. Safeguarding that trust and confidence will be of the utmost importance as we collectively venture into new territories in the payments ecosystem.”
He closed with a rallying call: “Now is the time to build on this solid foundation, to be ambitious and to push for an exciting future in the payments ecosystem. For our part, the Bank will certainly not sit idly on the rails. So let’s get on board the innovation train, imagine the possibilities of where we can go together—and go full steam ahead.”
