Canada proposes 1% stablecoin redemption fee cap and three-day repayment deadline with restrictions on issuer-funded rewards.
DeFi & Yields ·
Canada published proposed Stablecoin Regulations on October 24, 2026, imposing a 1% cap on redemption fees and requiring issuers to initiate repayment within three business days of a holder's request. The rules also restrict issuer-funded rewards—including income-sharing arrangements where an issuer finances another party's costs to pay interest—though rewards tied solely to stablecoin usage remain permitted. A public consultation period ends December 23, 2026.
The redemption timeline begins when a holder submits a request; within that window, the issuer must liquidate reserve assets if needed and start the payment transfer, though the deadline does not guarantee when funds arrive in the holder's bank account. Issuers must publish redemption policies, disclose all fees, and provide seven days' notice before raising charges. The Finance Department noted that current market redemption fees typically max around 0.1%, and argued a 1% ceiling prevents constraining smaller operators with higher per-unit costs.
Reserve assets must remain denominated in the reference currency and cover outstanding stablecoin value daily, with eligible holdings including demand deposits, cash, short-term government debt, qualified reverse repurchase agreements, and specific money market funds. These provisions remain proposals pending implementation of the Stablecoin Act, which received royal assent in March 2026.