Canada has proposed rules that would let a stablecoin holder cash out any amount at par, no later than three business days from the request, for a fee of no more than 1%.
Canada’s Department of Finance published the proposal for comment in the Canada Gazette, Part I, on 24 October 2026, according to the Gazette text. Royal assent for the Stablecoin Act came in March 2026, and the Act is not in force. This text would bring it into operation in fall 2027, on a day the Governor in Council sets by order. Nothing changes for a holder today.
Cross-province and cross-border issuance has no full federal framework. Provincial and territorial securities regulators decide which coins a trading platform may offer. The Act would cover domestic and foreign issuers other than banks, trust and loan companies, insurers, credit unions and foreign financial institutions. The Bank of Canada would register and supervise those issuers, and the Minister of Finance could direct the Bank to refuse an applicant over national security.
Any amount back at par
Par means one coin for one unit of the currency it tracks. Any fiat currency can fill that role. There is no minimum.
The issuer would have to finish the cash-out within three business days of the request. By then, the department’s analysis says, it has sold reserve assets if needed and started sending ordinary money, which can reach the holder’s bank later. Canadian reserve securities settle in one day and foreign-currency ones in two, so the extra day is for processing. Saturday and holidays do not count.
The issuer can limit one day’s redemptions if a liquidity shortfall in the markets for its reserve assets leaves it unable to meet every request. That limit is an exception to the any-amount duty and the three-day clock. The policy sent to the Bank must say when the limit may apply and which payment setup the holder needs, and an update goes out at once with an explanation.
A 1% ceiling on the fee
The redemption fee would stop at 1% of the amount paid out, and a notice on the issuer’s website cannot raise it past that. Purchase and redemption fees would be disclosed, with at least seven days’ notice before a redemption fee starts or rises. The department puts direct redemptions near 0.1% today and says a ceiling there could pinch smaller issuers, while one well above 1% could push people away.
No yield just for holding
An issuer could not pay interest or yield for holding the coin, or arrange that yield with another party through income-sharing it funds. That party need not hold the coin. A use-only reward, including one paid through income-sharing, would be allowed. The coin could not be presented as legal tender, money on deposit, evidence of a deposit, or insured or government-backed. After several rounds of consultation with industry, the department kept the ban on yield for held balances and allowed transaction-based rewards.
What must sit in the reserve
Each day would end with the reserve in the coin’s currency, at a market value at least equal to the par value of coins still outstanding. The count follows purchases by people who normally live in Canada and by companies based there.
Eligible assets are demand deposits (the department’s note adds cash), government debt of any country due within three months, money-market funds invested only in the reference currency or those other assets, and a one-day reverse repurchase. The issuer buys the short government debt and the seller buys it back the next business day at a higher price.
Backing must stay at least one-to-one, with no required mix, the flexibility financial technology companies asked for. Assets could not be pledged for another debt except a one-day sale of that government debt, and only to fund redemptions. A custodian incorporated under federal or provincial law would hold them apart, for redemption only, out of other creditors’ reach if the issuer or the custodian fails.
Who would have to register
A covered issuer would apply to the Bank of Canada before issuing. An issuer already issuing the day before the Act takes effect could keep issuing if it applies within 30 days. A missed window or a refusal would mean it has to stop. An application fee and a yearly assessment would bill supervision to issuers rather than to taxpayers.
Policies would cover governance, risk, data security, and recovery and resolution. After a consumer protection organization noted the value of a complaint mechanism, the text added one: acknowledge within seven days and resolve within 30. Each month a certified accountant’s opinion would go to the Bank on the value of coins still out, what the reserve holds, and whether the reserve meets the rule.
Payment companies that hold the coins
A payment service provider is a company that performs a payment function, such as a processor or a digital wallet. A prescribed stablecoin would bring it under the Retail Payment Activities Act: registration with the Bank, safeguarding of users’ funds, and operational risk. Prescribed covers a coin from an issuer on the Bank’s list, or from a financial institution under federal, provincial or foreign law similar in substance on yield, redemption, reserves and custody. If the company remains the holder and the user keeps the right to use the coin, the wallet would safeguard it and, if the issuer fails, give the user access without delay, including redemption into the reference currency.
What the consultations changed
Stakeholders were broadly supportive and wanted speed. Securities regulators and provincial and territorial governments stressed their own jurisdiction and consistent rules. The Governor of the Bank may exempt an issuer, or a class, where a provincial or foreign regime is similar in substance. Financial technology companies wanted the text finished quickly so new Canadian issuers could compete with large foreign issuers already in the market.
Sixty days to send comments
Comments run for 60 days after the 24 October 2026 publication, through the online form on the Gazette website. After the final text appears in Part II, the Bank will consult on guidelines and release them before the rules start.
PTYcoin covered the OCC final rule on the GENIUS Act.
If adopted, a holder of a coin from a registered issuer could redeem any amount at par, pay at most 1%, and could not earn issuer-funded yield just for holding. A use-only reward could still be paid. None of this applies today.
This article is not investment advice.
