Canada enacts framework to regulate stablecoin in Bill C-15

In November 2025, we published an article discussing the Federal government’s announcement in Budget 2025 of the intention to regulate stablecoin. Recognizing its growing role in payments and financial markets, the federal government has enacted Canada’s first comprehensive regulatory framework through the Stablecoin Act (Act) in the Budget 2025 Implementation Act, No. 1, Bill C-15. This legislation targets private-sector stablecoin issuers operating across jurisdictions and seeks to address consumer protection and national security considerations.

Bill C-15 initially attracted criticism due to its omnibus structure, which combines a wide range of diverse and complex initiatives, limiting the depth of review and parliamentary scrutiny. Nevertheless, the legislation received Royal Assent on March 26, 2026, and the Department of Finance has since begun developing supporting regulations. This process is expected to continue over the next 12 to 18 months, with the stablecoin framework anticipated to come into force in 2027.

Key measures

• Supervisory authority: the Act designates the Bank of Canada as the primary authority responsible for supervising issuers, monitoring market developments, and enforcing compliance.
• Mandatory registration regime: non-prudentially regulated stablecoin issuers must apply to be listed on a public registry maintained by the Bank of Canada before issuing stablecoins in Canada.
• Ministerial and national security powers: the Minister of Finance is granted authority to review issuer applications for national security concerns and may impose conditions, issue directives, or prohibit an issuer from issuing stablecoins where necessary in the public interest or for national security reasons.
• Reserve and redemption requirements: issuers must maintain a reserve of assets, implement policies surrounding redemption, and comply with reporting and disclosure obligations.
• Enforcement: administrative monetary penalties are introduced to ensure compliance.

Scope and application

The Act defines a “stablecoin” as “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.”

The regime applies only to stablecoins with interprovincial or international applications. Broadly speaking, this includes stablecoins traded on exchanges that serve users across multiple provinces and stablecoins used for cross-border payments. This jurisdictional scope reflects the constitutional division of powers, which limits federal authority over trade and commerce to interprovincial and international matters.

The Act does not apply to certain issuers or arrangements, including: federally regulated financial institutions subject to regulatory exceptions; central banks; and closed-loop stablecoins, such as tokens that function only within a specific platform.

Role of the Bank of Canada

Under the legislation, the Bank of Canada assumes a supervisory role over stablecoin issuers, which came into effect on March 26, 2026, when Bill C-15 received Royal Assent. The Bank of Canada will ensure compliance with the Act, promote the adoption of appropriate policies, and monitor broader risks in the stablecoin market.

To support this mandate, the Bank of Canada is granted broad oversight powers. These include the ability to:

• request information from users to verify compliance;
• require undertakings;
• impose conditions;
• enter into compliance agreements with issuers; and
• direct an issuer to take corrective measures where necessary to ensure adherence to the Act.

Where an issuer has contravened the Act, the Bank may also recommend that the Minister of Finance prohibit them from issuing stablecoins. The Bank has discretion to address unsafe or unsound practices through directives and other remedies.

Key obligations of stablecoin issuers

Registration

The Act establishes a mandatory registration regime for stablecoin issuers. Issuers must be listed on a public registry maintained by the Bank of Canada before they may issue stablecoins.

To be added to the registry, an applicant must submit an application describing their ownership structure, organization, technological infrastructure, and operational policies. Applicants must also provide evidence of their financial condition and submit statements from a lawyer and a certified accountant attesting to their compliance.

The Minister of Finance will be entitled to extend the review period, review applications for national security concerns, and direct the Bank to refuse an application where appropriate.

Redemption

Stablecoin issuers must establish and maintain a redemption policy in accordance with the Act and associated regulation. They must offer at-par redemption. This is intended to ensure holders can redeem stablecoins for the underlying reference currency under transparent and predictable conditions.

Reserve

Stablecoin issuers must maintain a reserve of assets denominated in the relevant reference currency, which has a value equal to or greater than the par value of outstanding stablecoins. These reserve assets are strictly protected under the Act. They may only be used to satisfy redemption obligations and cannot be pledged as collateral, secured, or otherwise encumbered. In addition, reserve assets must be held with qualified custodians and segregated from both the custodian’s assets and the issuer’s other assets.

Reporting and disclosure

The Act introduces robust reporting and transparency requirements. At least once a month, issuers must provide the Bank of Canada with a report containing a statement from an independent certified accountant regarding the issuer’s financial condition, the number of outstanding stablecoins, and the composition and fair market value of the assets held in the issuer’s reserve. The report must also include a statement from an independent lawyer confirming that the issuer’s reserve assets are not pledged, secured, or otherwise encumbered, and are being held with qualified custodians in the proper manner.

Stablecoin issuers must establish and maintain a publicly-available governance policy, risk management policy, data security policy, and recovery and resolution policy in accordance with the regulations.

Key prohibitions

The Act includes several restrictions designed to protect consumers. Stablecoin issuers are prohibited from communicating or providing false or misleading information to the public.

Issuers are prohibited from paying holders any form of interest or yield on their stablecoin. This restriction illustrates the intent to treat stablecoins primarily as payment instruments rather than deposit or investment products. Yield-bearing crypto products have historically been associated with significant market failures and heightened risk. The legislation may be aimed at mitigating these consumer protection risks.

There are additional prohibitions imposed to preserve the distinction between stablecoin and sovereign currencies, regulated deposit-taking and government-insured products.

Violations and penalties

The Act introduces a framework of administrative monetary penalties designed to promote compliance with the Act.

The Bank of Canada may issue a notice of violation with an administrative monetary penalty to any person it reasonably believes has contravened the Act. A two-year limitation period applies, beginning when the Bank becomes aware of the acts or omissions that constitute the violation.

Recipients must either pay the penalty or make representations to the Governor within 30 days seeking to reduce or waive the penalty. They may rely on a due diligence defence as well as other defences available at common law.

A further right of appeal to the Federal Court is available within 30 days of notice of the Governor’s decision, or within 90 days on which representations were made if no notice of decision has been issued and served. Importantly, the Act clarifies that violations are not criminal offences.

Conclusion 

The Stablecoin Act represents a significant step in the federal government’s efforts to establish a regulatory framework for digital assets in Canada. The Department of Finance will continue to work with key partners to monitor ongoing domestic and international developments.

Organizations operating in this space should closely assess how requirements under the Act may affect their business and monitor the development of supporting regulations, which are expected to be finalized over the coming months. Contact a member of our Financial Services or Compliance team if you have any questions or need further assistance.