Canada Proposes Fees of Up to 1% for Stablecoin Redemption Within 3 Days
Key Facts
Canada published draft regulations implementing the Stablecoin Act on October 24 and opened a 60-day public comment period ending December 23, 2026, at 11:59 p.m. Eastern Time, according to the Canada Gazette and the Department of Finance. The draft proposes completing redemptions within 3 business days of an initial request, with redemption fees capped at 1% of the amount. The rules are intended to set requirements for implementing the Stablecoin Act, which received royal assent in March 2026. The regulations aim to govern issuers’ registration with the Bank of Canada and the application of the obligations set out in the law. The government expects the framework to take effect in 2027.
The law covers domestic and foreign stablecoin issuers that are not prudentially regulated as financial institutions. It excludes banks, trust and loan companies, insurance companies, credit unions and foreign financial institutions, according to the draft published in the Canada Gazette. The law requires issuers to apply for registration with the Bank of Canada and hold reserves denominated in the stablecoin’s reference currency. Reserve coverage must be at least one to one, and redemption must be available at the same ratio. These requirements establish a uniform basis for linking an issued currency to the assets designated to support its redemption.
The proposed regulations detail the redemption terms facing holders. In addition to the three-day deadline, the rules set no minimum value for a redemption request, allowing requests regardless of size. Proposed fees are capped at 1% of the amount redeemed. Issuers must also notify holders on their websites at least 7 days before any fee increase takes effect. The draft thus combines a deadline for completing redemptions, a limit on their cost and advance notice of any increase.
The proposed rules prohibit offering a return tied solely to holding a stablecoin. They allow rewards or payments linked to its use, provided they are not tied solely to holding it. The government says a lack of comprehensive oversight could lead to insufficient reserves to support redemptions or weak risk management practices. It also cites issuer insolvency risks and risks involving the security of financial and personal information. These concerns provide the context for the draft’s provisions on reserves, redemption and issuer oversight.
The draft follows the government’s conclusion that Canada lacks a comprehensive regulatory framework for issuing stablecoins with applications across provinces and international borders. Canadian authorities had monitored the trading of some of these currencies on crypto-asset trading platforms, but that did not amount to a comprehensive framework governing their issuance. The Department of Finance says earlier consultations on the framework included 7 discussion sessions in January 2026 and 3 sessions in June of the same year. The government said stakeholders generally supported applying a stablecoin framework in Canada and stressed the importance of timely action. It said, however, that views differed on specific regulatory details.
The government places the draft within an international trend toward stablecoin regulation, citing the GENIUS Act in the United States and the European Union’s Markets in Crypto-Assets regulatory framework, as well as regimes in Japan, Singapore, Hong Kong and the United Kingdom. The Department of Finance said the Canadian framework was designed with international frameworks and best practices in mind, without presenting it as the adoption of any specific U.S. law. The U.S. GENIUS Act was passed in August 2025, according to the department. The government expects the Canadian framework to take effect in 2027, after the regulatory process is completed.
The government estimates the annual cost of the regulations and related amendments to covered stablecoin issuers and payment service providers at about 240,648 Canadian dollars. After the final regulations are published in Part II of the Canada Gazette, the Bank of Canada plans to issue guidance for consultation on specific topics related to the law and proposed regulations. The current comment period remains open until December 23, 2026, at 11:59 p.m. Eastern Time. These steps are expected to precede the framework’s entry into force in 2027.