Which stablecoin services fall within the scope of MSBs
The virtual currency business activities listed by FINTRAC include fiat-to-virtual-currency exchange, virtual-currency-to-virtual-currency exchange, transferring virtual currency at a client's request, and receiving virtual currency for onward transmission to a beneficiary. Where an institution collects virtual currency on behalf of merchants or pays bills for enterprises, the mere fact that the activity is a commercial payment rather than an investment transaction does not exclude its application. The assessment also requires satisfaction of the relevant business and geographic conditions; not every company that holds stablecoins must register. A company paying its own procurement invoices should be analyzed separately from continuous payment on behalf of others.
Canadian-registered companies and foreign MSBs are two different pathways
FINTRAC's interpretation of "having a place of business in Canada" looks beyond physical premises and also includes circumstances such as Canadian registration, local employees, agents or branches. An entity that has no place of business in Canada but targets Canadian clients with the listed services and actually carries them out may qualify as a foreign MSB. Where an offshore platform does not establish an office in Canada but advertises to the Canadian market and accepts local clients for exchange, it is inappropriate to deny a registration obligation solely on the ground that "both the servers and the company are located offshore."
Fiat payment functions should be separately tested for central bank registration
The Bank of Canada examines payment functions, retail payment activities, geographic connections and exclusions under the Retail Payment Activities Act. "Retail" does not mean that only natural-person clients are considered; enterprise payment products must likewise be tested. Where, for example, a platform maintains fiat receipt and payment accounts for clients and initiates or executes electronic funds transfers, it cannot be assumed that no further review is required merely because FINTRAC registration has been completed. Conversely, merely providing virtual currency functions does not mean that fiat payment service requirements can be applied wholesale without analysis.
Registration is not a product safety certification, nor a global operating passport
FINTRAC expressly states that registration does not constitute recognition or licensing of a business, nor does it issue any so-called "certificate of registration" to businesses. For purchasers, it is more useful to verify the entity, status and actual contracting party in the official directory than to rely on certificate images produced by the service provider. For applicants, compliance programs, client identity verification, and recordkeeping and reporting capabilities must still be continuously implemented; bank access and licensing in clients' jurisdictions must be resolved independently.
Recommended actions
- Record the facts concerning Canadian registration, team, agents and client acquisition, and determine whether the local MSB pathway or the foreign MSB pathway applies.
- Separately list exchange, transfer, fiat accounts and remittance, and issue separate assessments against FINTRAC and central bank requirements.
- Check registration status in the official directory and verify whether the client agreement, bank account and website disclosures all refer to the same legal entity.
- Establish identity verification, transaction recordkeeping and reporting processes by currency and product, rather than merely submitting application documents.
Information note: This article provides general information and does not replace legal advice based on specific facts.
References
- Money services businesses: FINTRAC’s requirements — FINTRAC
- Money Services Business Registry — FINTRAC
- Criteria for registering payment service providers, updated 29 June 2026 — Bank of Canada
