Overview
- The Department of Finance published draft regulations in the Canada Gazette on Oct. 24 and opened a 60-day public consultation that closes on Dec. 23.
- Non-bank issuers would have to back every token one-to-one with high-quality reserves held at qualified Canadian custodians in segregated, bankruptcy-remote accounts.
- Holders must be able to redeem any amount at par with issuers required to complete redemptions within three business days and redemption fees capped at 1%, with narrow daily limits allowed only if reserve markets lack liquidity.
- The Bank of Canada would register and supervise issuers, the rules would cover foreign non-financial issuers serving Canadians, and penalties for very serious breaches could reach C$10 million while issuers would be forbidden from marketing tokens as bank deposits or claiming deposit insurance.
- If finalized to take effect in fall 2027, the rules will raise operating and custody costs for non-bank issuers, force changes to business models that rely on sharing reserve returns, and give users clearer, faster access to fiat when they cash out.