Canada seeks comments on proposed stablecoin rules through December 23

A consultation on issuance, rather than rules already being applied

Canada’s Department of Finance published proposed stablecoin regulations in the Canada Gazette on October 24, 2026. The consultation runs for 60 days, through December 23, 2026. The framework concerns issuers that are not financial institutions and targets stablecoins backed by fiat currency. The impact statement envisions entry into force in fall 2027, on a date determined under the statutory arrangements. These are therefore proposals that remain open for comment.

The document distinguishes regulation of issuance from the oversight that provincial and territorial authorities already exercise over trading platforms. The issuers concerned would need to apply for registration with the Bank of Canada before issuing stablecoins. Their applications would include the reference currency, reserve composition, custodians and third parties involved in the activity. This process would allow scrutiny of the issuer’s organization and the required information, without turning its tokens into official currency or bank deposits.

Redemption at par with specified deadlines and fees

The proposal provides for redemption at any holder’s request, without a minimum amount, in the reference currency. The issuer would have to complete redemption within three business days of the request and could not charge more than 1% of the value redeemed. The impact statement explains that this period accounts for settlement of securities held in reserve and operational processing. It specifies that the period covers liquidation of assets, if necessary, and initiation of the funds transfer.

An exception is nevertheless provided: an issuer could limit daily redemptions if it cannot meet all requests because of insufficient liquidity in the markets where reserve assets trade. Its policy would have to describe these circumstances and the available payment methods, in plain English and French. At least seven days’ notice would be required before introducing or increasing redemption fees. The proposed cap therefore means neither a free service nor immediate availability of funds.

Restrictions on holding-based returns and public guarantees

The restrictions target interest or returns linked to holding tokens. The proposal would also cover certain agreements with third parties that arrange or encourage indirect payments, including through revenue sharing. It nevertheless distinguishes rewards linked solely to using a stablecoin for transactions: when they do not compensate holding, this provision does not classify them as interest or returns. This distinction means the text cannot be summarized as a general elimination of every program associated with stablecoins.

At the end of each day, the reserve’s market value would have to be at least equal to the face value of outstanding tokens. The proposal would also prohibit suggesting that a stablecoin is legal tender, constitutes a deposit, is insured under a public scheme or benefits from a government guarantee. Reserve, disclosure and redemption obligations thus form proposed requirements for issuers; they do not promise public protection of holdings. The comments received still have to inform the finalization of the regulations.