Stablecoins: Canada Seeks to Align Its Rules With the United States

Ottawa opens a 60-day consultation on stablecoins issued by non-financial actors. The project notably provides for reimbursement within three business days, caps redemption fees at 1%, and prohibits returns related to holding. To develop its framework, Canada relies on several foreign models, including that of the United States.

Stablecoins: Ottawa prohibits returns and deceptive promises

As the United States approaches the deadline for their mandatory compliance calendar before 2027, Canada specifies its own requirements in turn. The draft regulation is based on the Canadian stablecoins law, adopted in March 2026, as well as the law governing retail payment activities.

The text targets issuers who are not already subject to regulation applicable to financial institutions. Banks, insurers, trusts, and credit unions are therefore exempt from this scheme.

Ottawa sets three main limits: issuers will neither be able to disseminate misleading information, nor pay interest or returns linked to holding stablecoins, nor present their tokens as legal tender, a bank deposit, or a state-guaranteed product.

Moreover, the ban on returns also covers agreements made with third parties. The government thus wants to prevent arrangements in which a partner finances interest paid by another actor to encourage users to keep their stablecoins.

Reimbursement within three days and fees capped at 1%

The project requires issuers to reimburse holders on request, with no minimum amount, within a maximum of three business days. In the United States, the Fed has proposed a two-day period. Canada therefore provides a slightly longer period, which takes into account the settlement cycles of assets held in reserve.

In addition, redemption fees cannot exceed 1% of the reimbursed amount. According to the document, this ceiling represents a compromise: although 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 must notify their clients at least seven days before any increase, by posting a notice on their website.

Canada, United States, Europe, several regulatory models

Canada is preparing its framework as major jurisdictions advance their own rules. The U.S. GENIUS Act is set to come into effect in January 2027. On its side, the European MiCA regulation could lead platforms to stop offering certain non-compliant stablecoins, notably the USDT.

Ottawa plans an implementation in fall 2027. Until then, affected issuers will have to prepare for registration with the Bank of Canada, a prerequisite for any issuance.

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 allows Canada some leeway to set its own requirements. The ban on returns and the fee cap illustrate these choices. The next steps will clarify how Ottawa plans to reconcile holder protection, compliance costs, and the development of the crypto market.