Canada opens stablecoin consultation, citing US GENIUS Act

Canada has opened a 60-day public consultation on proposed stablecoin regulations covering issuers that are not financial institutions. The proposal, published October 24 in the Canada Gazette, seeks feedback through December 23, 2026, ahead of a planned rollout in fall 2027, Cointelegraph reported.

The draft would support implementation of the Stablecoin Act, which received royal assent in March. According to Cointelegraph, the government cited consistency with the United States and other jurisdictions as a way to reduce the regulatory burden on issuers operating across borders.

Under the proposed framework, covered issuers would need to apply for registration with the Bank of Canada before issuing stablecoins. The Department of Finance says the regime would cover domestic and foreign non-financial issuers making fiat-backed tokens available to Canadians, without distinguishing between Canadian-dollar and foreign-currency denominations.

Fiat-backed stablecoins are digital assets designed to track a reference currency. Finance officials say Canadians primarily use them in cryptocurrency trading and as a bridge between conventional money and digital assets, while the framework is intended to support greater confidence in payment uses, including international transfers.

The proposed redemption rules would require issuers to initiate the transfer of fiat funds within three business days of a holder’s request, after liquidating reserves where necessary. Redemption fees would be capped at 1% of the amount redeemed, and issuers could not impose a minimum redemption amount, according to the Canada Gazette.

The draft also clarifies restrictions on interest or yield linked to holding stablecoins, including issuer-funded arrangements with third parties. Rewards tied solely to using a token, rather than holding it, would remain permitted. The government says the distinction is intended to separate stablecoins from deposits and investment products.

The broader framework would require reserves of high-quality liquid assets in the token’s reference currency, backing outstanding stablecoins at least one-for-one. Finance officials also outline requirements for published redemption policies, corporate governance, data security and recovery planning, placing responsibility on issuers for both financial backing and operational safeguards.

International compatibility is a central policy objective, with Canada identifying the US GENIUS Act and the European Union’s Markets in Crypto-Assets framework as reference points. In the United States, the Office of the Comptroller of the Currency published its final GENIUS Act implementation rule on October 21, with an effective date of January 18, 2027.

The OCC rule covers reserve assets, redemption, risk management, reporting, custody and registration for issuers under its jurisdiction. Canada’s consultation concerns its own proposed requirements rather than adoption of the American rules, leaving the public feedback process to inform the final Canadian regulations.

The immediate next step is the December consultation deadline. Cointelegraph reported that the government intends the regulations to take effect in fall 2027; until the proposals are finalized and brought into force, their detailed requirements remain proposed rather than operational obligations under the new regime.