Overview
- The Department of Finance published the draft regulations in the Canada Gazette on Saturday and opened a 60-day public consultation that closes on December 23, 2026.
- Under the proposal issuers must match outstanding tokens with high-quality liquid reserves held in Canadian custody on a daily basis to ensure each token is backed.
- Stablecoins covered by the rules would be redeemable at par with a proposed three-business-day processing window and a fee cap of 1% for small redemptions, with limited daily redemption limits allowed if reserve-asset markets lack liquidity.
- Non-bank issuers would need to register with the Bank of Canada, which gains a gatekeeping role for cross-provincial and international stablecoins while banks remain outside this regime.
- The draft bans paying passive interest to holders but allows transaction-based rewards, a change that will reshape issuers’ business models and raises operational costs from daily reserve matching and Canadian custody; the government aims to finalize the rules for implementation in fall 2027.