Canada Proposes Direct Stablecoin Redemption With 1% Fee Cap

The Canadian government has introduced new guidelines for the stablecoin market. The proposal allows retail investors to request direct redemption of their assets from issuers without the need to meet a minimum value requirement.

The text sets a 1% cap on fees charged by issuers for each redemption transaction. The expected timeframe for payment completion is up to three business days after the request. In situations of liquidity shortages in reserves, companies may apply daily withdrawal limits.

The implementation of these rules is tied to the Stablecoin Act, with an expected effective date in the fall of 2027. Issuers must publicly disclose their payment policies and any changes to fees at least seven days in advance.

The measure seeks to increase legal certainty for local users by guaranteeing redemption at the face value of the tracked currency. Holders of assets pegged to the US dollar will receive payment in the same currency, maintaining the need for banking arrangements for conversions into Canadian dollars.

Regulatory changes in developed markets increase operational predictability for digital assets, which may reduce the perception of systemic risk during times of financial stress.