Canada’s Department of Finance published draft Stablecoin Regulations in the Canada Gazette, Part I, on Saturday 24 October 2026, and the redemption rule is the part holders will notice. Under the Canada stablecoin regulation as proposed, an issuer would have to buy back its coin from any holder who asks, whatever the amount, within three business days, and could charge a fee of no more than 1% of the sum redeemed. The Bank of Canada would register and supervise the issuers. The text is open for comment for 60 days from publication on 24 October, which by our count runs to 23 December, and the government aims to bring it into force in fall 2027.
The rules sit under the Stablecoin Act, the federal law passed as part of Budget 2025. The notice that the Governor in Council proposes to make them is dated 9 October, and the text went out for consultation fifteen days later. Nothing in it applies yet.
Trade media read the draft as a win for small holders. That is a narrow reading. The wording covers every holder, from a retail user with a few dollars of USDC to a fund with millions, and it sets no minimum. What the draft adds, compared with the US and the EU, is a number on the fee: a ceiling of 1%, where Brussels allows no fee at all and Washington asks only that fees be disclosed.
How cash-out would work: any amount, three business days, 1% ceiling
The redemption duty is in proposed section 15. The issuer must redeem the outstanding stablecoin when any holder asks, “regardless of the value”, in the words of the draft, and finish the job within three business days. The fee it charges for that may not exceed 1% of the amount redeemed.
A business day, for this purpose, is any day other than a Saturday or a holiday (section 15(4)). Redemption is one for one in the coin’s reference currency. On that wording, a US dollar coin would be paid out in US dollars, not converted into Canadian dollars; the draft does not say to which kind of account the money must go.
In money terms, the cap is easy to read. On C$10,000 redeemed, the fee could not exceed C$100. On a C$50 balance, the maximum is 50 cents. An issuer that wants to start charging, or to raise its fee, must post a notice on its website at least seven days before (section 15(3)). Issuers would also have to publish a redemption policy, in English and French and in plain language, that sets out the process, the payment methods and the cases where daily limits can apply (section 16).
There is one escape valve. Section 15(2) lets an issuer limit the daily amount it redeems, but only when a shortfall of liquidity in the markets where its reserve assets trade stops it from meeting every request. The draft sets no figure for that limit, and the 1% ceiling on the fee still applies on such days.
Why 1% and not 0.1%
The Department of Finance explains the figure in the regulatory impact analysis that comes with the draft. It notes that the current market has trended toward redemption fees topping out around 0.1%, and says that setting the cap at that level “could be overly restrictive for emerging or smaller-scale issuers”. The 1% is therefore a ceiling chosen to leave room for new entrants, not a description of what large issuers charge today.
Read the other way, it is a permission. An issuer could, within the rules, charge ten times the level the department itself describes as the market norm, as long as it gives seven days’ notice.
What else the Canada stablecoin regulation demands of issuers
Redemption only works if the money is there. The draft sets a daily test: at the end of each day, the market value of the reserve must be at least equal to the par value of the coins in circulation (section 17). Eligible assets are cash and demand deposits, government debt maturing in three months or less, reverse repurchase agreements of one business day and money market funds that hold only such assets.
Reserves would be held by a qualified custodian incorporated under federal or provincial law, in a segregated account that is bankruptcy remote. The issuer could enter a one-day repurchase agreement on its government debt, but only to raise the reference currency needed to pay redemptions. Returns earned on the reserve can be withdrawn as long as the value stays at or above par.
Two other sections protect the promise from the marketing side. Sections 13 and 14 forbid an issuer to present its coin as paying interest or yield, as legal tender, as a deposit or as insured by the state; a reward tied to a transaction rather than to holding the coin is not treated as interest.
Section 22 adds a recovery and resolution policy, which must explain how holders would be paid if the issuer became insolvent or decided to stop issuing the coin.
The penalties are sized for the redemption promise. Administrative monetary penalties would reach C$1 million for a serious violation and C$10 million for a very serious one, a class that includes failing to hold adequate reserves or to redeem at par.
Who is covered, and the Bank of Canada as supervisor
The Act targets issuers that are not prudentially regulated financial institutions. Banks, trust, loan and insurance companies, credit unions and foreign financial institutions are outside it. So are closed-loop coins, which can only buy goods or services from a given merchant or group of merchants and can be redeemed for fiat only from them or an affiliate of the issuer.
A coin falls in scope when it is bought by someone whose usual residence, head office or principal place of business is in Canada. That is how foreign coins used by Canadians, such as Tether’s USDT or Circle’s USDC, come into the picture; our comparison of USDT and USDC explains how the two differ. The department’s cost analysis assumes the regime would apply to five issuers.
The Bank of Canada would be the regulator. It would register non-bank issuers, supervise them and take enforcement action. The mandate came with the Budget 2025 implementation bill, Bill C-15, which received Royal Assent on 26 March 2026, as DLA Piper summarised in April. The Minister of Finance keeps powers over national security, including refusing an application, imposing conditions or prohibiting issuance.
Existing issuers get a bridge. Those that apply for registration within 30 days of the Act coming into force could keep issuing until the Bank decides; those that miss the window would have to stop. The relief concerns registration only. It does not suspend the redemption duties once the rules apply.
Canada, the US and the EU compared
Three large markets now have written redemption rules, and they differ on the points a holder cares about. The US side below combines the GENIUS Act and the final rule of the Office of the Comptroller of the Currency (OCC), which applies to the issuers the OCC supervises.
| Canada (draft, 24 Oct 2026) | United States (GENIUS Act, OCC rule) | European Union (MiCA, e-money tokens) | |
|---|---|---|---|
| Who can redeem | Any holder, regardless of the value | OCC rule: any number of coins from one upward, after customer screening and onboarding | Any holder, at any time, at par |
| Deadline | Three business days | OCC rule: no more than two business days after the request | No number of days in article 49; “at any time” |
| Fee | Allowed, capped at 1% of the amount; 7 days’ notice before charging or raising | Allowed, must be disclosed in plain language; at least 7 days’ notice of changes (seven calendar days in the OCC rule) | No fee (article 49(6)), without prejudice to the recovery-plan rules of article 46 |
| Limits under stress | Daily limit allowed if reserve markets lack liquidity | Above 10% of outstanding coins redeemed in 24 hours: notify the OCC within 24 hours, may ask for an extension | Recovery plan (articles 46 and 55) must list recovery options, including liquidity fees on redemptions, daily limits and suspension |
| Supervisor | Bank of Canada | OCC, Federal Reserve, FDIC or state regulators | National authorities (ACPR and AMF in France, Banca d’Italia and Consob in Italy) |
| Status | Proposal; comments for 60 days from 24 October; target fall 2027 | Law and OCC rule take effect on 18 January 2027 | In force |
The US statute itself is short on numbers. Section 4(a)(1)(B) of the GENIUS Act requires a published redemption policy with “clear and conspicuous procedures for timely redemption”, plain-language disclosure of all fees, and at least seven days’ notice before fees change. It does not define “timely”. The OCC filled that gap in its final rule of 21 October, which caps the delay at two business days and bars issuers from refusing amounts of one coin or more; the details are in our report on the OCC final rule.
Europe went further on the fee. Article 49 of MiCA, as published in the ESMA interactive single rulebook, says that an issuer of an e-money token must redeem it at the holder’s request, at any time and at par value, and that redemption “shall not be subject to a fee”. The phrase opens with “without prejudice to Article 46”. That article, which article 55 applies to e-money token issuers, requires a recovery plan for when the reserve falls short of the rules, and the plan’s options include liquidity fees on redemptions, limits on daily redemptions and suspension. So a fee is possible in the EU, but only as a crisis tool, not as a standing charge. Our guide to the MiCA regulation covers the rest of the EU regime.
Put side by side, Canada is tighter than the US statute on timing, since it writes a fixed clock into the rules, but a day slower than the OCC. It is looser than the EU on cost. A euro or dollar e-money token sold in France or Italy cannot charge for redemption at all; for French and Italian readers who hold EURC or USDC under MiCA, a 1% cap would be a step backwards. For a Canadian holder, redemption terms are for now whatever each issuer writes into its own policy, because the Stablecoin Act is not yet in force.
What is still open before fall 2027
Several points are not settled by the text. The draft does not say whether a US dollar redemption must be paid into a Canadian bank account. It does not set a number for the daily limit allowed under stress. No issuer had said, in public, by Monday morning whether it plans to register with the Bank of Canada, and we found no published comment from Circle, Tether or PayPal on the draft.
Comments go to the Department of Finance, preferably through the Canada Gazette website, or by email or post to Gloria Wong, Director, Digital Assets. Every submission, attachments included, will be published on the Gazette site. The window is 60 days from publication on 24 October. After that, the government can amend the text before it is made final; the stated target for entry into force is fall 2027, by order of the Governor in Council.
Newcomers who want the basics of how a coin keeps its peg and what a reserve is can start with our guide to what stablecoins are.