Canada Proposes Stablecoin Regulations to Bring National Oversight Under Bank of Canada

Canada's Department of Finance published proposed Stablecoin Regulations in the Canada Gazette on Oct. 24, 2026, setting the operational framework to bring the federal Stablecoin Act into force ¹. The statutory framework establishes comprehensive federal supervision for stablecoin issuers operating interprovincially or internationally, placing direct oversight under the Bank of Canada ¹.

Under the proposed regime, domestic and foreign non-bank stablecoin issuers must register with the Bank of Canada and maintain reserves denominated in the underlying fiat currency backed on at least a one-to-one basis ¹. Issuers must guarantee redemption rights on a one-to-one basis and implement internal frameworks covering corporate governance, risk management, data security, and recovery and resolution ¹. The regime empowers the Minister of Finance to evaluate applicants for national security risks and order the central bank to deny registration ¹. To fund supervision, the central bank will levy application fees and annual assessment fees on regulated entities, supported by an administrative monetary penalties regime for non-compliance ¹.

Extension to Retail Payment Service Providers

The draft regulations also amend the Retail Payment Activities Regulations to bring payment service providers handling stablecoins under the Retail Payment Activities Act ¹. The amendment expands existing supervisory powers to include services involving payment accounts, stablecoin holding, clearing, settlement, and the maintenance of private keys or tokenized payment instruments ¹. Banks, credit unions, trust companies, and prudentially regulated foreign financial institutions remain exempt from the Stablecoin Act's registration requirements ¹.

The federal initiative addresses a fragmented domestic structure where stablecoin oversight had primarily fallen to provincial and territorial securities regulators through crypto trading platform restrictions, such as Canadian Securities Administrators Staff Notice 21-333 ¹. With global peers implementing statutory frameworks like the European Union's MiCA and US federal measures, the draft rules establish Canada's first direct federal oversight over stablecoin issuance and processing ¹. At the time of writing, the broader crypto market traded flat, with $USDT holding at $0.9983.