Canada launches 60-day stablecoin regulatory consultation

The draft, published in the Canada Gazette, requires that reserves be held by qualified domestic financial institutions and kept separate from the issuer's own assets to ensure bankruptcy-remote status. Redemption fees are capped at 1%, with a three-business-day window for processing fiat transfers. These rules apply to both domestic and foreign non-financial entities offering fiat-backed tokens to Canadian users, regardless of the underlying currency.

The Canadian Web3 Council, which had lobbied for broader flexibility, argued that prohibitions should not capture legitimate merchant rebates or loyalty programs. The Bank of Canada will oversee compliance and enforcement, supported by a C$10 million budget allocation scheduled for 2026. This regulatory push arrives as major Canadian lenders—including Royal Bank of Canada and TD Bank—separately advance their own pilot projects for tokenized deposits, signaling a broader shift toward digitizing domestic payment infrastructure.