Karsten Wenzlaff, Advisor
August 26th, 2025
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Canada Releases The First Draft Of The Stablecoin Act
Stablecoin Regulation | Nov 21, 2025
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Canada’s Draft Stablecoin Act Inside Bill C 15 Now Sets Out Concrete Rules
On November 18 2025, the federal government of Canada released its first draft of the Stablecoin Act when introducing the Budget 2025 Implementation Act through Bill C 15. The legislation appears in Division 45 of Part 5 and establishes Canada’s first national framework for stablecoins. The official text published in the Bill C 15 First Reading record explains that the Act sets duties for stablecoin issuers, outlines the role of the Bank of Canada and introduces rules for reserves, redemption and governance. The full clause-by-clause level rules appear in the Draft Stablecoin Act document, now moved to a dedicated page on the Department of Finance's website under Canada's Stablecoin Framework.
How Stablecoins Fit Into Canadian Law
The Act explains that if a company issues a stablecoin and follows this new federal law, the company is not treated like a bank for certain parts of the Bank Act, the Insurance Companies Act or the Trust and Loan Companies Act. In simple terms, if a company issues a stablecoin under this law, it is not treated as if it is taking deposits like a bank. This helps make sure that stablecoin issuers are regulated, but not in a way that turns them into banks.
See: Bank of England Sets New Rules for Systemic Stablecoins
The draft Act also says that if a company issues a stablecoin and follows this law, it is not treated as if it is dealing in securities for the specific federal rules listed in the Act.
Clear Duties for Stablecoin Issuers
The Act gives the Bank of Canada the job of keeping a public list of approved stablecoin issuers. An issuer must not give false or misleading information to the public.
The Act also places limits on what issuers are allowed to do. An issuer cannot use regulated words or symbols in a way that breaks future rules. An issuer cannot pay interest or any form of yield to stablecoin holders. This means stablecoins covered by this Act cannot look or act like investment products.
The Act also says an issuer cannot offer a stablecoin if it is treated as official money anywhere in the world. The issuer cannot offer a stablecoin if it is viewed as a bank deposit, if it is insured by a government deposit insurance program or if it is guaranteed by a government.
Reserves, Safety and How Customer Money Is Protected
The Act has strong rules for how issuers must hold reserves. An issuer must hold enough assets to match the full value of all stablecoins in circulation. These assets can only be used to redeem stablecoins. They cannot be used for anything else.
The reserve must consist of the same currency the stablecoin is tied to or high quality liquid assets in that currency. Only the Bank of Canada or future regulations can approve other reserve assets.
See: Quantum Safe Stablecoins Meet Real Time Finance Needs
The Act protects these reserves from being pledged, used as collateral, or borrowed against. The issuer cannot let anyone else have a claim on them.
The issuer must keep reserve assets with qualified custodians. The custodian must hold these assets separately from their own. The assets must not be available to satisfy the debts of the custodian or the issuer. They exist only to support redemptions. This helps keep customer value safe even if something goes wrong with the issuer or the custodian.
Redemption Rights for Stablecoin Holders
The Act makes clear that stablecoins must be redeemable at face value in the official currency they track. The issuer must follow this rule in line with future regulations. This protects users who want to convert stablecoins back into regular money.
Issuer Governance and Oversight
Issuers must have a governance policy that sets out who is responsible for what. This includes the responsibilities of the governing body and senior management, how accountability works, how third party service providers are managed and how conflicts of interest are handled. This pushes issuers to run stablecoin operations with clear oversight and internal controls.
Securities, Deposits and Anti Money Laundering
The Act explains where stablecoins fit into the wider regulatory world. A compliant stablecoin issuer is not considered to be dealing in securities or taking deposits for certain sections of federal prudential laws.
The Act also says that a stablecoin issuer counts as a business dealing in virtual currency under Canada’s anti-money laundering and anti-terrorist financing laws. This means the issuer must follow all federal AML and ATF rules, just like any other virtual currency business.
Outlook
The draft Act must still move through Parliament. Many details will depend on future regulations written by the Minister and guidance from the Bank of Canada. Provinces will continue to have their own rules, including securities and consumer protection laws. The restriction on interest and yield pushes stablecoins towards payment and settlement functionality rather than investment use. The reserve and custody rules help protect customers. The governance requirements ensure that issuers treat stablecoins as serious financial products with clear oversight.
See: Stablecoin Insights From FCAC’s 2025 National Survey
This draft law provides clear rules on reserves, custody, redemption and governance. It also clarifies how stablecoins fit within Canadian financial law, which helps fintechs design products, build payment systems and plan compliance with confidence. Earlier this year in July 2025, EY published a report on various approaches to global stablecoin regulation
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