- Canada‘s draft stablecoin regulations, published October 24, open a 60-day comment period, with the rules targeted to take effect in fall 2027.
- Issuers must hold one-to-one reserves with Canadian custodians, redeem within three business days for no more than a 1% fee, and could not pay interest for holding a coin.
- Penalties run up to approximately $7.2 million (C$10 million) for very serious violations, with the Bank of Canada supervising issuers.
Canada published its draft stablecoin regulations on October 24, requiring issuers to fully back every token with liquid reserves. The draft rules, published in the Canada Gazette, open a 60-day comment period and target a fall 2027 implementation.
Issuers must hold one-to-one reserves in cash or short-term government debt placed with a Canadian custodian. Holders can redeem any amount within three business days, with fees capped at 1%.
“There is a pressing need for faster, cheaper, more transparent and more accessible cross-border payments services,” said Bank of Canada executive director Ron Morrow. The central bank will register and supervise stablecoin issuers.
The regulations ban paying interest to holders, distinguishing them from traditional bank deposits. Rewards tied to using a coin, rather than holding it, remain allowed.
Penalties for very serious violations, such as failing to hold adequate reserves, can reach approximately $7.2 million (C$10 million). The notice assumes five issuers and roughly 30 payment companies will fall under the new oversight.
Meanwhile, the U.S. GENIUS Act, signed into law in July 2025, similarly prohibits issuers from paying interest. The debate over yield has been deeply divisive in the United States, contributing to the failure of the broader Clarity Act in the Senate.
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