Canada is considering rules that would allow eligible stablecoin holders to redeem tokens directly with an issuer regardless of the size of their balance, with issuer fees capped at 1%.
The proposal, published on Oct. 24, would create a potential alternative to selling stablecoins through a cryptocurrency exchange. Covered issuers would generally have to complete a redemption within three business days and pay the holder at par value in the currency tracked by the token. According to CryptoSlate, the framework could be particularly important for smaller retail holders, who may otherwise face limited direct access to an issuer’s redemption system.
The proposed terms are not yet in force. Canada’s Stablecoin Act received royal assent on March 26, but core provisions remain inactive. The government’s impact statement identifies fall 2027 as the intended implementation period, while the current proposal is subject to a 60-day consultation.
How the proposed redemption route would work
Under the proposed section 15, an issuer could not reject an otherwise eligible redemption request simply because the holder wanted to redeem a small amount. The issuer would normally have three business days to complete the payment, and the fee charged for the redemption could not exceed 1%.
The ceiling is a maximum rather than a fixed charge. The eventual cost could depend on the issuer’s published fee and the banking or payment route used to deliver the funds. Issuers would also have to provide at least seven days’ notice on their websites before introducing or increasing a redemption fee.
Redemption policies would need to explain available payment methods and the circumstances in which daily limits could be imposed. A three-business-day issuer deadline would not necessarily determine when an external bank makes the proceeds available to the recipient.
The reference currency is also significant. A holder of USDC, for example, would have a par-redemption claim in U.S. dollars. Someone seeking Canadian dollars would still need an appropriate currency-conversion or payment arrangement.
The proposal permits a liquidity exception in a specific circumstance: an issuer could limit redemptions on a daily basis if a shortage of liquidity in the markets where its reserve assets trade meant it could not satisfy all requests. This would override the ordinary any-size and timing requirements, but not the 1% fee cap. The exception is tied to reserve-market liquidity rather than a broad ability to postpone payments whenever market conditions are difficult.
Coverage and the Circle access question
Whether a holder qualifies would depend on factors including the purchaser’s location, the issuing entity and any exclusions or exemptions. The proposed framework would cover domestic and foreign issuers that create a stablecoin and make it available, directly or indirectly, to a person in Canada, where the token has actual or reasonably expected interprovincial or international uses.
For determining which stablecoins are outstanding, the proposal looks to a buyer’s usual residence, head office or principal place of business in Canada. Citizenship alone would not establish coverage. Central-bank issuers are excluded, while financial-institution and closed-loop exclusions would depend partly on regulations. The Bank of Canada governor could also order exemptions, potentially with conditions, where provincial or foreign requirements are substantially similar.
Circle’s present USDC arrangements illustrate why the final scope will matter. Circle’s terms for holders outside the European Economic Area, updated Oct. 15, make direct redemption conditional on a Circle Mint account in good standing. Circle Mint is designed for institutions and registered distributors in supported regions and excludes individuals using the service for personal purposes.
Eligible institutional users must complete background, identity, know-your-customer and sanctions checks. They must also connect a verified bank account held in the same name as the verified Mint account. Circle offers wire minting and redemption, while SEPA and other banking-network transfers depend on participating banks in limited regions.
Circle’s current terms therefore do not allow every USDC holder to send tokens directly to the issuer and request a bank payment. The proposed Canadian wording, which refers to redemption by any covered holder, could provide broader access if the relevant USDC issuing entity falls within the future framework. Circle National Trust’s role as a custodian does not itself establish whether the named USDC issuer would be covered; a future Canadian registration or exemption decision would be more relevant.
Reserves, implementation and the current market picture
The planned reserve rules would require reserves at least equal to the outstanding par value of covered stablecoins, held in the reference currency or qualifying liquid assets. Permitted assets would include demand deposits, short-term government debt, qualifying money-market funds and specified overnight repurchase arrangements. Reserves would be separated from claims by the issuer’s and custodian’s creditors, apart from holders’ redemption claims.
That structure would support redemption claims but would not make a stablecoin an insured bank deposit. The Act would also prohibit covered issuers from describing it as one.
The consultation and later decisions will determine which issuers are covered, what payment arrangements are available and how useful direct redemption becomes in practice. Proposed transitional relief would allow pre-existing issuers that apply within 30 days of commencement to continue issuing while their application is considered. This concerns registration and would not suspend redemption obligations.
Moneyiar market data at the stated times showed Cardano (ADA) at $0.2052460416, down 0.31% over 24 hours and 6.04% over seven days, as of Oct. 25, 2026, at 22:39 +03:30. Dai (DAI) stood at $0.9987994219, down 0.10% in 24 hours and 0.16% in seven days, as of 22:38. STABLE traded at $0.0265498473, down 2.51% over 24 hours but up 10.84% over seven days, as of 22:39. CAP was $0.1084662705, up 35.10% over 24 hours and 55.28% over seven days, as of 22:38.
