> ## Content Index > Fetch the complete content index at: https://stablecoininsider.org/llms.txt > Use this file to discover other available public pages before exploring further. # Canada Stablecoin Regulations: 3-Day Redemption, 1% Fee Cap - URL: https://stablecoininsider.org/canada-stablecoin-regulations/ - Published: 2026-10-24T07:00:53.000Z - Updated: 2026-10-24T07:01:05.000Z - Description: Canada published its proposed Stablecoin Regulations in the Canada Gazette on 24 October 2026. Issuers register with the Bank of Canada, redeem within three business days, cap redemption fees at 1% and pay tiered supervision fees. Comments close 23 December 2026. - Author: Alexandra - Tags: News, Stablecoins, Stablecoin Regulations, Bank of Canada, CAD-Pegged Tokens, GENIUS Act Canada stablecoin regulations are finally on paper. The Department of Finance published the proposed Stablecoin Regulations in the Canada Gazette, Part I, Vol. 160, No. 43, dated 24 October 2026, and they are the missing piece needed to bring the Stablecoin Act into force ([Canada Gazette](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). The headline rules are concrete. Issuers that are not banks register with the Bank of Canada, redeem within three business days, cap redemption fees at 1% and keep reserves at a Canadian custodian. The government wants the package in force in fall 2027 ([Canada Gazette, Implementation](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). Stablecoin Insider read the full regulatory text. Below: who is covered, the reserve and redemption rules, the yield ban, a worked fee example, and a side-by-side with the US GENIUS Act rule the OCC finalized this week. ### Key Takeaways - Comments on the draft close on 23 December 2026 at 11:59 pm EST, a 60-day window ([Canada Gazette consultations](https://gazette.gc.ca/consult/consult2-eng.html)). - Issuers must redeem within three business days, with no minimum amount and fees capped at 1% ([Canada Gazette](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). - Reserves must equal outstanding stablecoins at the end of each day and sit with a Canadian-incorporated custodian ([Canada Gazette](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). - Annual supervision fees start from a C$25,000 base and reach C$750,000 plus a variable share for issuers above C$1 billion ([Canada Gazette](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). - Penalties reach C$1 million for a serious violation and C$10 million for a very serious one ([Canada Gazette](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). ## What Canada published on 24 October The Stablecoin Act received royal assent on 26 March 2026 as part of the Budget 2025 Implementation Act, No. 1, but most of its provisions are not yet in force ([Stablecoin Act, Justice Laws](https://laws.justice.gc.ca/eng/acts/s-15.9/FullText.html)). Stablecoin Insider covered the draft Act when it first appeared in the budget bill; see [Canada's draft Stablecoin Act](https://stablecoininsider.org/canada-stablecoin-act/). [Canada Introduces Draft Stablecoin Act in Budget 2025 Implementation BillStablecoin Insider's December 2025 breakdown of the Act these regulations now bring into force.![](https://stablecoininsider.org/favicon.ico)Stablecoin Insider](https://stablecoininsider.org/canada-stablecoin-act/) The new package does two jobs. It fills in the Act's details on registration, reserves, redemption, policies, reporting, fees and penalties. It also amends the Retail Payment Activities Regulations so that payment service providers moving prescribed stablecoins fall under Bank of Canada supervision too ([Canada Gazette](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). The Bank of Canada will register issuers, supervise compliance, monitor issuance and redemption risk and take enforcement action ([Bank of Canada](https://www.bankofcanada.ca/regulatory-oversight/stablecoins/)). The Department of Finance writes the rules. ## Who the rules cover, and who they skip The regime targets fiat-backed stablecoins issued by entities that are not prudentially regulated financial institutions. Banks, trust, loan and insurance companies, credit unions and foreign financial institutions are outside it, whether they issue from Canada or abroad ([Canada Gazette](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). - **Issuer means control.** The issuer is whoever controls both the creation and the distribution of the coin, even if it outsources the work. - **Canadian holders only.** "Purchased" means bought by a person whose usual residence, head office or main place of business is in Canada. - **Closed-loop coins are out.** A token usable only inside one merchant network, and redeemable only by those merchants, works like a gift card and is excluded. - **Existing issuers get 30 days.** Anyone already issuing can keep going if it files an application within 30 days of the Act coming into force ([Canada Gazette, transitional measures](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). Finance expects about five issuers at the start, naming QCAD from Stablecorp, CADC from Loon Technology and USDC from Circle, plus new entrants ([Canada Gazette, baseline scenario](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). For the CAD-coin backstory, read the [QCAD explainer](https://stablecoininsider.org/qcad-canadas-first-regulated-stablecoin/) and [Canada's stablecoin rush](https://stablecoininsider.org/canadas-stablecoin-rush/). ## Reserve and redemption rules Reserves must be held in the reference currency and match or exceed outstanding stablecoins at the end of every day. Only four asset types qualify ([Canada Gazette, reserve of assets](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)): - Demand deposits, including cash. - Government debt securities with three months or less to maturity. - One-business-day reverse repos backed by that same short government debt. - Money market funds made up entirely of eligible reserve assets. There are no composition limits inside that list, a change Finance made after fintechs pushed for flexibility. Reserves can't be pledged, but one-day repos are allowed to meet redemptions, and issuers may withdraw returns above the 1:1 line ([Canada Gazette, consultation](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). Custody is where Canada is strict. The qualified custodian must be a financial institution incorporated under federal or provincial law, so reserves stay in Canada in an insolvency. Each stablecoin needs its own segregated, bankruptcy-remote account ([Canada Gazette](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). On redemption, issuers must pay out at par within three business days of a request, with no minimum. Finance chose three days to fit T+1 Canadian and T+2 foreign securities settlement, plus one day of processing. Fee increases need seven days' notice on the issuer's website ([Canada Gazette, redemption](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). Why 1%? Finance notes that market redemption fees top out around 0.1%, but says a cap that low could shut out smaller Canadian issuers ([Canada Gazette](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). On a C$10,000 redemption, that means a legal maximum of C$100 against a typical C$10 today. 📌 Scope note: these are proposed regulations, not final law. Finance can change any figure after the comment period, and the Bank of Canada will publish its own supervisory guidelines once the final text appears in Canada Gazette, Part II. ## The yield ban, and the rewards carve-out Issuers can't pay interest or yield for holding a stablecoin, and can't market a coin as legal tender, a deposit, insured or government-guaranteed. The ban also catches arrangements with third parties, such as income-sharing deals where the issuer funds a partner's yield ([Canada Gazette, prohibition](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). The carve-out matters for exchanges and wallets. A reward tied only to using a stablecoin, not to holding it, is allowed, even when it's paid through an income-sharing arrangement ([Canada Gazette](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). That's a cleaner line than the US one, which turns on whether a payment is made "solely" for holding. ## What registration will cost: a worked fee example The Bank of Canada must recover its supervision costs, which Finance estimates at C$2.5 million a year. Each issuer pays a base amount by tier plus a variable share: Tier 1 issuers split 75% of the remaining costs and Tier 2 issuers split 25% ([Canada Gazette, assessment of fees](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). | Issuer tier (illustrative market of five) | Base fee | Variable share | Annual assessment | | ----------------------------------------- | --------- | -------------- | ----------------- | | Tier 1 (C$1B or more outstanding) | C$750,000 | C$993,750 | C$1,743,750 | | Tier 2 (C$500M to under C$1B) | C$350,000 | C$331,250 | C$681,250 | | Tier 3 (under C$500M), each of three | C$25,000 | None | C$25,000 | Stablecoin Insider calculation using the formula in section 34 of the proposed text: remaining costs = C$2,500,000 minus C$1,175,000 of base fees = C$1,325,000\. Assumes one Tier 1, one Tier 2 and three Tier 3 issuers, before CPI indexing. Source: [Canada Gazette, 24 Oct 2026](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html). The takeaway: a big foreign issuer above C$1 billion carries most of the bill, and a small CAD issuer pays C$25,000\. Compliance work adds an estimated C$17,704 per issuer per year on average ([Canada Gazette, costs](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). ## Canada vs the US GENIUS Act rule The OCC finalized its GENIUS Act rule on 21 October, effective 18 January 2027 ([OCC Bulletin 2026-50](https://www.occ.gov/news-issuances/bulletins/2026/bulletin-2026-50.html)). Stablecoin Insider's [OCC final rule breakdown](https://stablecoininsider.org/occ-genius-act-final-rule/) covers it in full. Here's how the two compare. | Area | Canada proposed Stablecoin Regulations | US OCC GENIUS Act final rule | | ------------------- | ------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------- | | Status | Proposed; comments to 23 Dec 2026; target in force fall 2027 ([Gazette](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)) | Final; effective 18 Jan 2027 ([OCC](https://www.occ.gov/news-issuances/bulletins/2026/bulletin-2026-50.html)) | | Supervisor | Bank of Canada, for issuers that are not financial institutions | OCC, for its federal and foreign issuers | | Redemption deadline | Three business days, no minimum | Two business days ([final rule](https://www.occ.gov/news-issuances/news-releases/2026/nr-occ-2026-92a.pdf)) | | Redemption fees | Capped at 1%; seven days' notice of increases | No percentage cap in the OCC rule | | Reserve mix | Four asset types, no composition limits | At least 5% daily liquidity; 40% per-counterparty cap ([final rule](https://www.occ.gov/news-issuances/news-releases/2026/nr-occ-2026-92a.pdf)) | | Custody | Canadian-incorporated custodian only | Eligible custodians under the rule | | Yield | Banned for holding; use-based rewards allowed | Banned; affiliate and partner deals judged case by case | | Capital | No capital requirement in the proposed text | US$5 million floor plus 12 months of expenses ([final rule](https://www.occ.gov/news-issuances/news-releases/2026/nr-occ-2026-92a.pdf)) | | Penalties | Up to C$1M serious, C$10M very serious ([Gazette](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)) | Under GENIUS Act enforcement powers | Canada is looser on reserve mix and capital but tighter on custody location and fees. Finance says it drew on Financial Stability Board guidance so Canadian issuers have a shot at US recognition, though it can't predict whether Washington will grant it ([Canada Gazette, benefits](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). ## Other obligations issuers should plan for - **National security review.** The Finance Minister has 60 days to decide on a review, and a review runs 180 days, both extendable ([Canada Gazette](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). - **Monthly reporting.** Each month, an accountant's opinion on outstanding coins and reserves, plus Canadian issuance and redemption counts and custodian names. - **Complaints.** Respond within 7 days and resolve within 30, inside the governance policy. - **Bilingual summaries.** Plain-language summaries of each policy in English and French on the issuer's website. - **Change notices.** Most significant changes need seven days' notice to the Bank; records are kept for five years. Payment firms are pulled in too. Finance estimates about 30 more payment service providers, such as custodial wallets and crypto payment processors, will join the more than 2,000 already supervised under the Retail Payment Activities Act ([Canada Gazette, regulatory scenario](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). Industry reaction so far is cautious. Koleya Karringten of the Canadian Bitcoin Consortium told BetaKit that most issuers will still have to navigate both the Bank of Canada and securities regulators, and asked for joint guidance ([BetaKit](https://betakit.com/government-of-canada-unveils-proposed-stablecoin-regulations/)). 💡 Stablecoin Insider's take: the 1% cap and Canadian custody rule are a bet on small domestic CAD issuers, not on USDC. A C$25,000 Tier 3 fee is cheap, but a three-day redemption clock and monthly accountant opinions are real fixed costs. Expect QCAD and CADC to file within the 30-day window, and expect large US-dollar issuers to lobby for a substantial-similarity exemption under section 14 rather than build a separate Canadian reserve stack. [Read the Q3 2026 Stablecoin Report](https://stablecoininsider.org/q3-2026-stablecoin-report-main-insights/) --- ## FAQ #### What are the Canada stablecoin regulations? They are proposed rules under the Stablecoin Act, published in the Canada Gazette, Part I, on 24 October 2026\. They set registration, reserve, redemption, reporting, fee and penalty rules for issuers supervised by the Bank of Canada ([Canada Gazette](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). #### When do Canada's stablecoin rules take effect? The government intends them to come into force with the Act in fall 2027, on a date set by order in council ([Canada Gazette](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). #### How do I comment on the proposed Stablecoin Regulations? Use the online commenting feature on the Canada Gazette website before 23 December 2026, 11:59 pm EST, or email the Department of Finance's digital assets team ([open consultations](https://gazette.gc.ca/consult/consult2-eng.html)). #### Do banks need to register their stablecoins with the Bank of Canada? No. Banks, credit unions, trust, loan and insurance companies and foreign financial institutions are excluded from the Stablecoin Act. Their stablecoins can still be prescribed units for payment firms under the Retail Payment Activities Act. #### Can Canadian stablecoin issuers pay yield? No yield or interest for holding a stablecoin, including through partners funded by the issuer. Rewards tied only to using the stablecoin are permitted. #### How fast must a Canadian stablecoin be redeemed? Within three business days of the request, at par, with no minimum amount and a redemption fee of no more than 1%. ## What to watch next Three things will shape the final text: comment letters due 23 December, the Bank of Canada's supervisory guidelines after final publication in Part II, and whether the Governor uses the section 14 exemption to recognize US or provincial regimes as substantially similar ([Canada Gazette](https://gazette.gc.ca/rp-pr/p1/2026/2026-10-24/html/reg1-eng.html)). If you issue or plan to issue a CAD or USD coin to Canadians, the practical step now is to map your reserve custodian, redemption timing and fee schedule against these rules and file a comment where they don't fit. This content is provided for informational and educational purposes only and does not constitute financial, investment, legal or tax advice. The rules described here are proposed and may change before they are finalized. No material herein should be interpreted as a recommendation, endorsement, or solicitation to buy or sell.