Canada's government has opened a 60-day public consultation on proposed stablecoin regulations, accepting comments until late December. The proposals, published October 24 in the Canada Gazette, would implement Canada's Stablecoin Act, which received royal assent in March 2026.
Key Requirements for Stablecoin Issuers
Under the proposed framework, stablecoin issuers would be required to register with the Bank of Canada and maintain reserves backing outstanding tokens at a minimum one-to-one ratio. Reserve assets must consist of highly liquid holdings, including demand deposits, government debt securities maturing within three months, certain money market funds, and short-term repurchase arrangements.
All reserves would need to be held with qualified custodians incorporated in Canada, with safeguards designed to protect token holders in case of issuer insolvency. Issuers would be required to disclose information about their reserves and submit monthly reports to the Bank of Canada.
Consumer Protections and Restrictions
Stablecoin holders would have the right to redeem their tokens at face value in the underlying currency, with issuers required to initiate payment within three business days of a redemption request. The proposal prohibits issuers from paying interest or yield for simply holding stablecoins and restricts misleading claims that tokens are government-backed or insured.
The framework would apply to domestic and foreign nonbank issuers engaged in stablecoin issuance in Canada, while excluding prudentially regulated financial institutions such as banks and credit unions. The government also proposes extending oversight under the Retail Payment Activities Act to payment service providers handling stablecoin transactions, including certain crypto exchanges, digital wallets, and payment processors.
Alignment with U.S. and International Standards
Canada's regulatory initiative follows the U.S. GENIUS Act, signed into law on July 18, 2025. The American legislation establishes a federal framework for payment stablecoins, requiring one-to-one reserves using eligible liquid assets such as U.S. dollars and short-term Treasury securities. Both the U.S. regulations and the GENIUS Act are scheduled to take effect on January 18, 2027.
Canada's proposed framework shares several features with American legislation, particularly its emphasis on fully backed reserves, redemption rights, and issuer transparency. However, Canada places supervisory authority primarily with the Bank of Canada for covered nonbank issuers and includes specific national security review powers for the finance minister.
The Canadian government has acknowledged the GENIUS Act, Europe's Markets in Crypto-Assets framework, and regulatory regimes in Asia as part of the international movement toward formal stablecoin oversight.
