Canada's federal budget for fiscal year 2026 proposes that banks and other federally regulated financial institutions issuing stablecoins must do so through separate subsidiaries, thereby bringing these issuers under the regulatory scope of the Stablecoin Act and applying the same framework as non-bank issuers. The proposal also intends to extend the framework to foreign financial institutions that are not prudentially regulated in Canada. Under the proposal, stablecoins issued by bank subsidiaries will still be explicitly excluded from public deposit insurance and government guarantees, and will not convert into insured deposit balances.