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

Canada published proposed Stablecoin Regulations in Part I of the Canada Gazette on October 24, 2026, setting out how issuers would register with the Bank of Canada and hold reserves. The Department of Finance sponsors the proposal. Comments are open for 60 days, and the government intends the rules to take effect in fall 2027.

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

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

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

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