Canada proposes stablecoin rules requiring Bank of Canada registration and one-to-one reserves

The Department of Finance published draft regulations under the Stablecoin Act, opening a 60-day comment period before rules the government intends to take effect in fall 2027.

Canada published proposed Stablecoin Regulations in Part I of the Canada Gazette on October 24, 2026. The regulations set out requirements for issuers to register with the Bank of Canada and hold reserves. The Department of Finance sponsors the proposal.

The rules would require issuers to register with the Bank of Canada before issuing stablecoins. Reserves must be held in the stablecoin’s reference currency and equal at least the total outstanding at the end of each day. Eligible holdings include demand deposits, government debt maturing within three months, one-business-day reverse repos, and money market funds holding only those assets. Reserves must be held at a Canadian-incorporated custodian in a segregated, bankruptcy-remote account.

Holders could redeem stablecoins one-to-one within three business days of a request, with no minimum amount. Redemption fees would be capped at 1% of the amount redeemed. The government said current fees average around 0.1%, but a lower cap could be too restrictive for smaller issuers, while a higher cap could discourage use.

Issuers could not pay interest or yield for holding stablecoins or encourage holding, though transaction-based rewards are permitted. Stablecoins could not be presented as legal tender, deposits, insured, or government-guaranteed. Penalties for violations range up to C$1 million for serious breaches and C$10 million for very serious ones.

Foreign issuers are subject to the rules, but the Bank of Canada’s Governor may exempt an issuer under a substantially similar foreign regime. Banks, credit unions, and other prudentially regulated institutions are excluded from the framework.

The comment period runs for 60 days, and the government intends the rules to take effect in fall 2027.