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Canada is creating a federal licence for stablecoin issuers, run by the Bank of Canada. The Stablecoin Act was passed through the Budget 2025 Implementation Act and received Royal Assent in March 2026. It applies to any firm that issues a fiat-backed stablecoin, meaning a token designed to hold a fixed value against a currency such as the Canadian or US dollar, and makes it available to people in Canada, directly or through an exchange or wallet. The issuer does not need to be based in Canada to be caught.
The detailed rules are in the draft Stablecoin Regulations, published in the Canada Gazette, Part I on 24 October 2026. They cover registration, reserves, redemption, disclosure, risk management and the fees the Bank of Canada will charge. The government intends the regime to come into force in autumn 2027, and comments on the draft close on 23 December 2026.
Two groups should act now: issuers whose coins already reach Canadian users, who will have only 30 days after commencement to apply, and Canadian banks and fintechs planning their own coin, whose structure is shaped by the Budget 2026 changes described below.
| Date | What happens |
|---|---|
| March 2026 | Stablecoin Act receives Royal Assent |
| 24 October 2026 | Draft Stablecoin Regulations published in the Canada Gazette, Part I |
| 5 November 2026 | Budget 2026 proposes that federally regulated financial institutions issue only through non-financial subsidiaries |
| 23 December 2026 | 60-day comment period on the draft regulations closes |
| Autumn 2027 (intended) | Act and regulations come into force on a date set by order |
| 30 days after commencement | Existing issuers must have applied for registration to keep issuing |
The commencement date is fixed by order of the Governor in Council, so the exact day will be announced. Firms should plan on the autumn 2027 target and treat the 30-day window as the real deadline for an existing coin.
The Act regulates issuers that are not prudentially regulated financial institutions. A firm "issues" a stablecoin when it creates the coin and makes it available for purchase, directly or indirectly, by a person in Canada. Listing on an exchange used by Canadians, or offering the coin through a Canadian wallet or payment app, is enough.
| Firm | Position under the Act |
|---|---|
| Fintech or crypto firm issuing a Canadian dollar coin | Registers with the Bank of Canada |
| Foreign issuer whose US dollar coin reaches Canadian users | In scope; may be exempted where its home regime is substantially similar |
| Bank, trust, loan or insurance company, credit union | Outside the Act directly; Budget 2026 proposes issuance through a non-financial subsidiary |
| Closed-loop token usable only within one business | Outside scope |
| Token not backed by a fiat currency | Stays with provincial and territorial securities regulators |
The Governor of the Bank of Canada may exempt an issuer or class of issuers by order where a provincial or foreign framework is substantially similar. Large global issuers will look to this route, but it is an exemption granted case by case, not an automatic recognition, so foreign issuers should prepare as if registration is needed.
Every coin must be backed by reserve assets in the same currency. At the end of each day, the market value of the reserve must be at least equal to the value of all coins outstanding.
| Rule | Requirement in the draft regulations |
|---|---|
| Eligible assets | Demand deposits and cash; government debt with three months or less to maturity; one-business-day reverse repos backed by that debt; money market funds holding only these assets |
| Currency | The coin's reference currency |
| Custody | A qualified custodian incorporated under a federal or provincial Act |
| Segregation | A segregated, bankruptcy-remote account, separate for each coin |
| Pledging | Reserve assets cannot be pledged, except repos used to meet redemptions |
| Reporting | Monthly report with a certified accountant's opinion |
There are no limits on how the reserve is split between the eligible assets, and the issuer may withdraw income earned on the reserve while the reserve stays at least equal to the coins outstanding. The custodian requirement means a foreign issuer needs a Canadian custody arrangement for the reserve backing coins available in Canada.
Holders have a right to redeem at par, one for one in the reference currency. The draft regulations require payment within three business days of the request, with no minimum amount. Any redemption fee is capped at 1% of the amount redeemed, and an issuer must give at least seven days' notice on its website before raising a fee.
The Act prohibits paying interest or yield tied to holding a stablecoin. The draft regulations extend this to any arrangement that rewards holding a coin, or holding it for longer, including sharing reserve income for that purpose. Rewards linked only to using the coin, such as cashback on payments, remain allowed. Exchanges and wallets that offer yield on stablecoin balances will need to review those products for Canadian users.
Registration brings ongoing obligations that look much like the Bank of Canada's existing supervision of payment service providers under the Retail Payment Activities Act:
The draft sets no capital ratio or minimum capital figure. The one-for-one reserve is the main financial safeguard, supported by the resources requirement.
An application to the Bank of Canada sets out the coin and the business behind it:
The Minister has 60 days to decide whether to review an application on national security grounds and, if so, 180 days to complete the review, both extendable. Firms with foreign ownership should allow for this in their plans. The draft does not set a fixed decision period for the Bank's own review.
Issuers pay an annual assessment that recovers the Bank's supervision costs, estimated at $2.5 million a year. The draft sets three tiers by the value of coins outstanding:
| Tier (value outstanding) | Annual assessment |
|---|---|
| Tier 1: $1 billion or more | $750,000 base fee plus 75% of remaining recoverable costs |
| Tier 2: $500 million or more | $350,000 base fee plus 25% of remaining recoverable costs |
| Tier 3: under $500 million | $25,000 base fee, no variable fee |
Fees are adjusted for inflation. The Act allows an application fee, but the draft does not set an amount.
Budget 2026, tabled on 5 November 2026, proposes to require federally regulated financial institutions to issue stablecoins through non-financial institution subsidiaries, and to extend the Act to certain foreign institutions. A bank that wants a coin would therefore set up a separate company, register it with the Bank of Canada and meet the same reserve and redemption rules as a fintech issuer.
The budget also commits to consult on stronger protection for holders if an issuer or custodian becomes insolvent. These changes need legislation, so the final shape will follow in a budget implementation bill. For banks and credit unions, the practical step now is to plan the subsidiary, its governance and its custody arrangements alongside the comment period.
Canada's model is close to the UK and US approach of full one-for-one reserves in short-dated government debt, but its three-day redemption window is longer than the next-business-day standard in some markets. Our comparison of stablecoin licences by country sets out the rules in eleven markets, and our guide to the GENIUS Act for foreign issuers covers the US route.
Exchanges and wallets that list stablecoins also need their own Canadian position: dealing in virtual currency requires FINTRAC money services business registration, and payment functions may bring a firm under the Bank of Canada's retail payments regime. Our Canada MSB and Bank of Canada guide explains both. Payment firms registered with the Bank of Canada can now also join Canada's instant payment system, as our guide to Real-Time Rail access for payment firms explains.
Buckingham Capital Consulting has handled payments, e-money and cryptoasset licensing since 2013, including FINTRAC registrations and Bank of Canada retail payments filings. Our cryptoasset team prepares stablecoin issuers and the platforms that list them for registration, from scope and custody structure to the policy set and application. Contact us to discuss your Canadian plans.
The Bank of Canada registers and supervises issuers of fiat-backed stablecoins under the Stablecoin Act. Tokens not backed by a fiat currency stay with provincial and territorial securities regulators.
The government intends it to come into force in autumn 2027, on a date set by order. Existing issuers must apply within 30 days of commencement to keep issuing.
Yes, if their coin is made available to people in Canada, directly or indirectly. The Governor of the Bank of Canada may exempt issuers from substantially similar regimes by order.
Within three business days of the request, at par, with no minimum amount and a fee of no more than 1% under the draft regulations.
No. The Act prohibits interest or yield tied to holding a stablecoin. Rewards linked only to using the coin are allowed.
Budget 2026 proposes that federally regulated financial institutions issue stablecoins only through separate non-financial subsidiaries regulated under the Stablecoin Act.
The draft sets an annual assessment from a $25,000 base fee for issuers under $500 million outstanding to a $750,000 base fee plus a share of costs for issuers at $1 billion or more.
Get in touch: +44 7563 115980 (phone and WhatsApp) or [email protected].
This article is general information, not legal advice. Requirements change, and the regulator’s own publications take precedence.
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