Ottawa opens a 60-day consultation on stablecoins issued by non-financial players. The project notably provides for reimbursement within three business days, caps redemption fees at 1% and prohibits returns linked to holding. To develop its framework, Canada relies on several foreign models, including that of the United States.
In brief
- The consultation began on October 24, 2026 and will end on December 23.
- Issuers must reimburse holders within three business days and limit redemption fees to 1%.
- The framework law received royal assent in March 2026. Issuers will have to register with the Bank of Canada.
Stablecoins: Ottawa bans returns and misleading promises
As the United States approaches the end of its mandatory compliance schedule before 2027, Canada is in turn clarifying its requirements. The draft regulation is based on Canadian law on stablecoinsadopted in March 2026, as well as on the law governing retail payment activities.
The text targets issuers who are not already covered by the regulations applicable to financial institutions. Banks, insurers, trusts and credit unions are therefore exempt from this system.
Ottawa sets three main limits: issuers will neither be able to disseminate misleading information, nor pay interest or returns linked to the holding of stablecoins, nor present their tokens as legal tender, a bank deposit or a product guaranteed by the State.
In addition, the prohibition on returns also covers agreements concluded with third parties. The government thus wants to prevent arrangements in which a partner finances the interest paid by another actor in order to encourage users to keep their stablecoins.
Refund within three days and fees capped at 1%
The project requires issuers to reimburse holders upon request, with no minimum amount, within a maximum period of three business days. In the United States, the Fed has proposed a two-day delay. Canada therefore provides for a slightly longer time frame, which takes into account the settlement cycles of assets held in reserve.
Furthermore, the redemption fees cannot exceed 1% of the amount reimbursed. According to the document, this cap represents a compromise: even if some market players charge fees close to 0.1%, such a low limit could penalize smaller Canadian issuers.
Companies will also have to clearly display their purchase and redemption fees. Finally, they will have to warn their customers at least seven days before any increase, by publishing a notice on their website.
Canada, United States, Europe, several regulatory models
Canada is preparing its framework as major jurisdictions move forward with their own rules. The American GENIUS Act is due to come into force in January 2027. For its part, the European MiCA regulation could lead platforms to stop offering certain non-compliant stablecoins, notably USDT.
Ottawa is considering implementation in the fall of 2027. Until then, the issuers concerned will have to prepare for registration with the Bank of Canadaprior to any broadcast.
However, the government does not present its project as a copy of the American model. The official document cites six other regulatory frameworks, including those of the European Union, Japan, Singapore, Hong Kong and the United Kingdom.
This approach leaves Canada room to set its own requirements. The return ban and fee cap illustrate these choices. The next steps will clarify how Ottawa intends to reconcile protection of holders, compliance costs and development of the crypto market.
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