The federal Liberals introduced highly anticipated legislation on stablecoins—crypto assets pegged to the value of a real-world currency, like the dollar—and open banking Monday evening, providing new details on how the two frameworks will operate and be enforced.

Opening up open banking: Abraham Tachjian, head of regulatory affairs at the fintech Brim Financial and the Canadian government’s former open banking czar, said the legislation “expands the system tremendously” for the financial data-sharing framework by including all businesses, not just small ones. Open banking requires banks to share a customer’s financial data with third parties to power payments and services, but the extent to which business data will be included had been unclear until now. Open banking advocates argue including business data in the framework would help improve productivity and encourage economic growth by helping them operate more efficiently and gain better access to credit.

Stablecoin rules take shape: The Liberals also introduced a first look at proposed legislation regulating stablecoins under the Bank of Canada, as promised in the budget earlier this month. The Bank of Canada will maintain a public registry of companies that are authorized to issue stablecoins. They must hold the cash or high-quality liquid assets backing them in a segregated account with a qualified financial institution, ranging from banks to crypto-qualified custodians like Tetra Trust. The legislation bans stablecoin issuers from paying interest to holders. Lucas Matheson, head of Canada for the American crypto giant Coinbase, said he believes stablecoin holders should be eligible to earn interest on their balances just like bank deposits do, but that he’s overall happy with the bill. “This is probably the most significant moment for digital assets in Canada that we’ve seen,” he said.

A long road: Both pieces of legislation have been hotly anticipated by Canada’s fintech industry. Open banking has faced repeated delays since Ottawa started the process seven years ago. The issue has put fintechs and banks at loggerheads at times, since it’s expected to increase competition and requires banks to relinquish control of their valuable data. Canada’s crypto industry has long advocated for stablecoins to be regulated as payment instruments instead of securities, which come with strict rules that make it impractical to use them for everyday transactions. The use of stablecoins for payments has exploded in popularity since the U.S. introduced its own legislation regulating them in July. Matheson said he hopes Canada’s securities regulators, which used to be the main oversight bodies for stablecoins, will clarify what does and doesn’t fall under their jurisdiction in light of the new legislation.

Screening out screen scraping: The legislation reinforces Ottawa’s plan to ban screen scraping, a controversial data-harvesting workaround that some fintech advocates argue has become entrenched in the absence of the secure data feeds open banking will mandate. Screen scraping powers payments and services by asking users to input their online banking passwords so a bot can impersonate them and collect their transaction data, a practice that has been criticized by fintechs and banks alike as error-prone and insecure. The legislation bans the practice “subject to the regulations”—a qualifier that may well turn out to be important, Tachjian said. “The regulations could say, ‘Look, you can use screen scraping in this scenario,’” he said, providing exceptions in certain cases. Ethan Teclu, a spokesperson for the Canadian Bankers Association, said “we support the prohibition of screen scraping,” and that the organization will continue to work with the government on the best way to put it in practice. 

What’s next: The legislation released Monday is a “ways and means motion,” which introduces measures from the budget related to taxes. At a later date, the federal Liberals will introduce an additional bill related to the remaining measures in the budget. In an email, Department of Finance spokesperson Marie-France Faucher said she was unable to comment on whether that bill will contain additional language relating to stablecoins or open banking because it hasn’t been tabled in the House of Commons yet.