At a glance
- Canada’s Department of Finance published draft Stablecoin Regulations in the Canada Gazette on 24 Oct. They are needed to bring the Stablecoin Act into force.
- Issuers would have to redeem coins on request within three business days, with no minimum amount and a redemption fee of no more than 1%.
- The government intends the rules to take effect in fall 2027, according to the notice.
Stablecoin issuers that are not financial institutions would have to register with the Bank of Canada before issuing, the notice says. Financial institutions incorporated in Canada fall outside this registration regime. Issuers already operating would get transitional relief if they apply within 30 days of the Act coming into force.
The government expects about five issuers to be covered at first, naming QCAD from Stablecorp, CADC from Loon Technology and Circle’s USDC.
Reserves and redemptions
Reserves would have to be worth at least the par value of all coins outstanding. Eligible assets are cash and demand deposits, government debt maturing within three months, one-business-day reverse repurchase agreements, and money market funds that hold only those assets.
The assets would have to be held at a Canadian-incorporated qualified custodian. Each month, issuers would report to the Bank of Canada with a certified accountant’s opinion on their reserves.
The three-day window allows for one-day settlement in Canadian markets, two days abroad and one day of processing, the notice says. It says redemption fees in the market have tended to top out around 0.1%, and that a lower cap could be too strict for smaller issuers.
Issuers would have to disclose all fees and post notice on their website at least seven days before raising any. They could limit daily redemptions only if a liquidity shortfall in reserve-asset markets stopped them meeting every request.
Who earns the float?
Not the holder. The draft confirms that issuers may not pay interest or yield tied to holding a stablecoin. They also may not present a coin as legal tender, as a deposit or as insured.
Breaches would carry administrative penalties of up to C$1 million (about US$714,000) for a serious violation and C$10 million (about US$7.1 million) for a very serious one, the notice says. Failing to keep adequate reserves or to redeem at par counts as very serious.
Separate amendments would bring payment service providers that use stablecoins under Canada’s Retail Payment Activities Act. Closed-loop coins, which can only be spent with the issuer, fall outside the Stablecoin Act.
What it changes for users
Canadians holding a registered coin would have a legal right to cash it in at par within three business days, for a fee of 1% or less. They would also get a week’s warning of any fee increase.
Comments go to Gloria Wong, Director, Digital Assets at the Department of Finance, within 60 days of publication. The Gazette’s consultation page lists 23 Dec 2026 as the closing date.
In the US, the OCC’s final GENIUS Act rule also bars issuers from paying yield. For the basics, see what a dollar stablecoin is.
Related: HSBC’s RedCoin launch in Hong Kong
This article is for information only and is not investment advice.