Canada proposes stablecoin rules requiring Bank of Canada registration and one-to-one reserves

The Department of Finance published draft regulations under the Stablecoin Act, opening a 60-day comment period before rules the government intends to take effect in fall 2027.

Canada published proposed Stablecoin Regulations in Part I of the Canada Gazette on October 24, 2026. The rules outline requirements for issuers to register with the Bank of Canada and maintain reserves. The Department of Finance sponsors the proposal. Comments are open for 60 days, and the government intends the regulations to take effect in fall 2027.

Issuers must register with the Bank of Canada before issuing stablecoins. Reserves must match the stablecoin’s reference currency and equal at least the total outstanding at the end of each day. Eligible holdings include demand deposits, government debt maturing within three months, one-business-day reverse repos, and money market funds holding only those assets. Reserves must be held at a Canadian-incorporated custodian in a segregated, bankruptcy-remote account.

Holders may redeem stablecoins one-to-one within three business days of a request, with no minimum amount. Redemption fees are capped at 1% of the redeemed amount. The government said current fees average around 0.1%, but a lower cap could restrict smaller issuers, while a higher cap might discourage use.

Issuers cannot pay interest or yield for holding stablecoins or encourage holding, though transaction-based rewards are permitted. Stablecoins cannot be marketed as legal tender, deposits, insured, or government-guaranteed. Penalties for violations range up to C$1 million for serious breaches and C$10 million for very serious ones.

Foreign issuers are subject to the rules, but the Bank of Canada’s Governor may exempt issuers under a substantially similar foreign regime. Banks, credit unions, and other prudentially regulated institutions are excluded from the framework.