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Canada · Regulation & crypto · Source: Canada Gazette · News archive (older than 3 days)
Canada publishes proposed Stablecoin Regulations for public comment
Published · Updated
Editor: Hedal Kolanyi / AI-assisted
Correction (): Clarified which requirements are in the Stablecoin Act and which are in the proposed Regulations, and that neither the Act nor the Regulations is in force yet.
Summary: Canada's proposed Stablecoin Regulations were published in the Canada Gazette, Part I, on 24 October 2026, with a 60-day comment period. The Regulations are a draft and are not in force. They are needed to bring into force the Stablecoin Act, which received royal assent in March 2026 but has not yet been brought into force either. Once in force, the Act would require issuers to register with the Bank of Canada, hold reserves backed on at least a one-to-one basis and offer one-to-one redemption. The proposed Regulations would add a requirement to redeem within three business days of a request and cap redemption fees at 1% of the amount redeemed. The stated intention is for them to come into force in fall 2027.
Update, 28 October 2026:
We have added more details from the Gazette notice and from a summary by law firm Fasken.
The Stablecoin Act received royal assent in March 2026 but has not yet been brought into force. According to the Gazette notice, the Regulations are needed to bring it into force. The Act itself already requires reserves backed on at least a one-to-one basis and redemption on a one-to-one basis in the underlying currency, and it prohibits interest or yield on holding a stablecoin. The draft Regulations would:
- Redemption: require issuers to redeem stablecoins on request within three business days, regardless of the amount, and cap redemption fees at 1% of the amount redeemed. Fasken notes a limited exception where the issuer cannot meet all requests because of a liquidity shortfall in the markets for its reserve assets.
- Reserves: require the market value of the reserve, at the end of each day, to be at least equal to the par value of outstanding stablecoins, and limit reserve assets to high-quality liquid assets: demand deposits including cash, government debt maturing within three months, one-business-day reverse repos and money market funds made up only of such assets. Reserve assets would have to be held at a Canadian-incorporated qualified custodian.
- Yield: clarify the Act's ban on interest or yield, so that it also covers indirect payments through arrangements with third parties, such as income sharing. Rewards tied only to using a stablecoin, not to holding it, would not count as interest or yield.
- Penalties: set administrative penalties of up to C$1 million for serious violations and up to C$10 million for very serious ones.
Background
According to the Gazette notice, provincial securities regulators currently oversee stablecoins offered on crypto trading platforms, but there is no comprehensive federal framework for issuers whose stablecoins are used across provinces or internationally. The Act would not apply to prudentially regulated financial institutions such as banks. The notice says the government intends the regulations to take effect in fall 2027.
Under the draft, existing issuers could keep issuing during a transition period if they apply for registration within 30 days of the Act coming into force.
Why it matters
The proposal is part of a wider international effort to set rules for stablecoins, which are digital tokens designed to hold a fixed value against a currency such as the Canadian dollar. The notice says the yield ban is meant to keep stablecoins distinct from bank deposits and investment products. For users and businesses, the draft sets out what safeguards would apply to redemption and reserves.
What to watch next
- 23 December 2026: end of the comment period. The Gazette notice allows 60 days from publication on 24 October, and Fasken gives the closing date as 23 December.
- Fall 2027: the government's intended date for the Regulations to come into force, together with the Act, on a day to be set by order of the Governor in Council, according to the Gazette notice.
These are draft rules that may change after consultation, and neither the Act nor the Regulations is in force yet. This article does not assess any particular token and is not an endorsement of stablecoins or crypto-assets. xorchain.io has no connection to the proposal.
Sources
- Canada Gazette, Part I, Vol. 160, No. 43, "Stablecoin Regulations" (proposed), 24 October 2026
- Fasken, "Department of Finance Publishes Draft Stablecoin Regulations", 27 October 2026
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