Canada Sets Out Stablecoin Safeguards in New Public Consultation

Canada has opened a 60-day consultation on proposed stablecoin regulations covering redemption rights, reserve safeguards, and restrictions on interest payments. The government intends the rules to take effect in fall 2027.

Published in the Canada Gazette, the proposals would support implementation of the Stablecoin Act, which received royal assent in March. Public comments are open until December 23, 2026.

The framework covers domestic and foreign issuers of fiat-backed stablecoins offered to Canadians, excluding prudentially regulated financial institutions such as banks and credit unions. The Bank of Canada would register and supervise those issuers, monitor risks, and take enforcement action. 

Stablecoins would require full backing by high-quality liquid assets and redemption at face value. Issuers would also need policies covering governance, risk management, data security, and recovery and resolution.

The proposed regulations would preserve the Act’s prohibition on issuers paying interest or yield for holding stablecoins. However, rewards tied to transactions rather than holdings would be permitted.

Redemption fees would be capped at 1% of the amount redeemed, with no minimum redemption amount. Within three business days of a request, issuers would generally need to liquidate any necessary reserve assets and initiate the transfer of funds to the holder.

The government said the proposals seek consistency with international frameworks, including the US GENIUS Act, to support mutual recognition and reduce regulatory burdens for issuers operating across borders.