The Government of Canada has published its much-awaited draft legislation to regulate the issuance of fiat-backed stablecoins by non-prudentially regulated issuers in Canada. Division 45 of Part 5 of Bill C-15 An Act to implement certain provisions of the budget tabled in Parliament on November 4, 2025 (Bill C-15) introduces the Stablecoin Act (Canada) (the Act), which includes requirements for stablecoin issuers to: (i) register with the Bank of Canada; (ii) adopt and disclose specified policies and compliance frameworks; (iii) maintain a 1:1 reserve of highly liquid assets with a qualified custodian; and (iv) comply with certain reporting and verification requirements. The Act aligns with measures taken by other global regulators to introduce comprehensive regimes that support digital and financial innovation while addressing consumer protection, including under the recently introduced GENIUS Act in the United States.
Requirements for stablecoin issuers
The Act defines an “issuer” as any person that issues a stablecoin, where to “issue” means to create the stablecoin and to make it available for purchase, directly or indirectly, by a person in Canada, and where “stablecoin” refers to a digital asset that is intended or designed to maintain a stable value relative to the value of one fiat currency and that has the characteristics, if any, provided for in the regulations to the Act. The Act applies only in respect of stablecoins that have or could reasonably be expected to have interprovincial or international applications.
Under the Act, issuers must register with the Bank of Canada in accordance with prescribed procedures and must also provide certain information, including with respect to: (i) ownership, organization, and structure; (ii) technological systems; (iii) redemption, governance, risk management, data security, and recovery and resolution policies; and (iv) enforcement history. Issuers will also require a statement from an independent lawyer as to whether the measures adopted enable the issuer to comply with certain requirements relating to its reserve of assets as well as a statement from an independent certified accountant of the issuer’s financial condition.
Stablecoins must be redeemable 1:1 with the referenced fiat currency and backed by a reserve composed exclusively of the referenced fiat currency, or certain other high-quality liquid assets, that:
- has a value that is equal to or greater than the par value of outstanding stablecoins;
- is not used for any purpose other than to redeem outstanding stablecoins; and
- is not subject to any encumbrance other than as may be permitted by the regulations.
The reserve must be held by a qualified custodian, segregated from the qualified custodian’s own and the issuer’s other assets and protected from their creditors, including in the event of bankruptcy, and in accordance with any other conditions imposed by the regulations. Notably, in accordance with the regulations, issuers are also required to establish, implement, and maintain a recovery and resolution policy that describes the measures that the issuer has put in place to ensure an orderly resolution or winding down of the issuer’s activities in relation to the stablecoin that it issues, including with respect to the redemption of outstanding stablecoins and the protection of stablecoin holders’ claims to the reserve of assets.
Among other things, issuers’ reporting requirements include the provision of a monthly statement from a certified accountant of the issuer’s financial condition, the number of outstanding stablecoins, the composition of the issuer’s reserve and the fair market value of the assets in the reserve.
The Act also includes certain prohibitions. For instance, issuers must not, directly or indirectly, grant or pay to the holder of a stablecoin that the issuer has issued any form of interest or yield in respect of that stablecoin, whether in cash, digital assets, or other consideration. This will likely be subject to much discussion given prevalent global practices, including those designed to incentivize liquidity through rewards, and the fact that issuers such as banks may not be subject to such restrictions. Separately, issuers must also not communicate or otherwise provide false or misleading information to the public.
Matters of federal and provincial jurisdiction
Several provisions of the Act clarify that it is not intended to apply to Canadian financial institutions such as banks. For example, the Act expressly states that it does not apply to an issuer that is a financial institution or central bank, or to a closed-loop stablecoin.
Bill C-15 would, however, amend the Retail Payment Activities Act (Canada), which we discussed in a previous post, such that payment service providers (PSPs) using prescribed stablecoins come within the scope and under supervision of the RPAA.
The Act indicates that the issuance of a stablecoin, as provided, does not constitute “dealing in securities” or “engaging in the business of accepting deposit liabilities” for the purposes of certain other federal statutes; namely, the Bank Act, the Insurance Companies Act and the Trust and Loan Companies Act. The Act does not expressly prevent provincial securities laws from applying, however.
Finally, the Act also authorizes the Governor of the Bank of Canada to specify, by order, that the Act or its regulations, or any provision of the Act or its regulations, does not apply to or in respect of the applicant, issuer or class of applicants or issuers, where it is determined that a substantially similar provincial or foreign law, or provision of provincial or foreign law, applies.
Looking ahead
What remains to be seen is whether Canadian provincial securities regulators will similarly clarify the non-application of provincial securities laws to issuers that comply with the Act. It has long been considered that the interim regulatory solution (discussed below) was imposed by the Canadian Securities Administrators (CSA) due in part to the lack of a comprehensive regulatory regime to govern the issuance and sale of digital assets such as stablecoins. Whether the Act is considered to adequately fill that void, including through the more technical elements anticipated to be proposed under its regulations, remains to be determined. Of note, where the Bank of Canada is expressly authorized to supervise issuers to determine whether they are in compliance with the Act, it is also authorized to enter into agreements or arrangements with other governmental authorities or regulatory bodies for the purpose of exercising its powers or performing its duties and functions.
The Act comes after several years of patchwork regulation in Canada imposed by provincial securities regulators under provincial securities laws and by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), Canada's federal financial intelligence unit and anti-money laundering and anti-terrorist financing supervisor under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada). On October 5, 2023, the CSA issued guidance under CSA Staff Notice 21-333 Crypto Asset Trading Platforms: Terms and Conditions for Trading Value-Referenced Crypto Assets with Clients, which we also discussed in a previous post, providing an interim regulatory framework to govern what they referred to as “Value-Referenced Crypto Assets” (or VRCAs) and outlining terms and conditions applicable to regulated crypto asset trading platforms (CTPs) seeking to make available such stablecoins (or VRCAs) to their users. This interim framework, generally considered by market participants to be significantly more rigorous than comparable global regimes, has resulted in only one globally recognized stablecoin being made available in Canada.
While questions of federal and provincial jurisdiction remain and many of the technical details are to follow in the regulations, the Act represents a significant step forward for Canada in supporting the modernization of Canada’s payments ecosystem, by creating a legal foundation for stablecoins to be used more widely as payment instruments, with the possibility of future integration into national infrastructure such as the Real-Time Rail (RTR), Canada’s new national payment system that is designed to facilitate instant account-to-account payments, 24/7.
Strategically, the framework is also intended to strengthen Canada’s financial sovereignty by enabling the development of a domestic, regulated stablecoin ecosystem and by striving to balance encouraging innovation and managing systemic and consumer risks through robust supervisory and operational guardrails.
Find the original article — Newly minted: Canada’s proposed federal Stablecoin Act — as well as more insights from the Stikeman Elliott team on the firm’s Knowledge Hub.
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Ramandeep K. Grewal: Raman Grewal is a partner in the Corporate Group. She practises principally in corporate finance and mergers and acquisitions, having expertise on a wide range of matters including domestic and international securities offerings, corporate governance and securities regulatory compliance.
Alix d'Anglejan-Chatillon: Alix d’Anglejan-Chatillon is a partner and Co-Head of the Financial Products & Services Group. She practices principally in the areas of investment management, the regulation of capital markets and derivatives. Her clients include North-American, European and Asian-based investment fund managers, including managers of mutual funds, pooled funds, hedge funds, credit funds, private equity, real estate and infrastructure funds, and fund of fund structures, as well as commercial and investment banks, investment advisers, broker-dealers and other financial sector stakeholders.
Meaghan Obee Tower: Meaghan Obee Tower is a partner and Head of the Banking & Finance Group. She is also a part of the Financial Products & Services, Insurance & Reinsurance, and Restructuring & Insolvency Groups. Her practice focuses on secured and unsecured lending, debt financing, financial services regulation, and corporate insolvency/restructuring.