Canada Publishes Draft Stablecoin Regulations

Canada's Department of Finance on October 24 published draft regulations under the country's stablecoin law in the Canada Gazette. Issuers would have to redeem coins at par within three business days of a request, with redemption fees capped at 1%. Comments are open for 60 days from publication.

Details

The draft builds on the Stablecoin Act, which received Royal Assent in March 2026 as part of budget bill C-15. Under the Finance Department's framework, issuers register with the Bank of Canada, hold 1:1 reserves in high-quality liquid assets in the reference currency, and may not describe their coins as legal tender, a deposit or deposit-insured.

The draft text requires reserves to sit with a qualified custodian incorporated in Canada, in segregated accounts that are protected if the issuer fails. Issuers must give holders seven days' notice before raising redemption fees. Paying yield for simply holding coins is prohibited; Cryptopolitan reports the ban covers direct and indirect yield. Once the rules take effect, issuers get 30 days to apply for registration.

The government intends the regime to take effect in fall 2027. Comments go to the Digital Assets division of the Department of Finance.

What it means for the market

Canada is choosing a bank-centered model: reserves held at banks and no yield, so stablecoins don't compete with deposits. For dollar-coin issuers such as Tether and USDC, the question is whether they can serve Canadian users on these terms, as registration would be required.

This is a draft, not binding law; the final text may change after consultation. For the current market picture, see the daily brief.

This is not investment advice.