BTC $80,283 
ETH $2,323 
USDT $0.9994 
BNB $740.61 
XRP $1.30 
USDC $0.9999 
SOL $101.55 
TRX $0.3309 
FIGR_HELOC $1.06 
ZEC $1,237 Stablecoins · Explained
Canada proposes 1% fee cap and no minimum for stablecoin redemptions
Draft rules published Oct. 24 would let covered retail holders redeem directly with issuers within three business days, with limits allowed only in
Key takeaways
- Direct exit. Covered holders could ask an issuer for their money back instead of selling tokens on an exchange, and a small balance would no longer justify rejecting a request.
- Fee ceiling. The 1% figure is a maximum rather than a set rate, and issuers would need at least seven days' website notice before adding or raising a redemption fee.
- Scope unresolved. Whether USDC falls under the framework depends on purchaser-location tests and future registration or exemption decisions, not on citizenship alone.
What happened
Canada has proposed operating rules that would give covered retail stablecoin holders a direct route to redeem tokens with the issuer, with no minimum amount and a 1% cap on fees. The proposal was published on Oct. 24.
Under the draft, issuers would generally have to complete a redemption within three business days, a window the government's impact statement says reflects settlement cycles for reserve securities and operational processing. A small balance would no longer be an acceptable reason to turn down an otherwise covered request.
The text would also let issuers set daily redemption limits in one specific situation: when a shortage of liquidity in the markets where reserve assets trade prevents them from meeting every request. The 1% ceiling would stay in place during such limits. Issuers would have to post at least seven days' website notice before introducing or increasing a redemption fee, and their policies would have to spell out payment methods and the circumstances in which daily caps could apply.
First $0.0821Latest $0.0778-5.1% over the period
Points are daily observations, not closing prices.
Why it matters
The proposal matters because it would create a legal exit alongside selling tokens on an exchange. Redemption at par means face value in the currency the stablecoin tracks, so USDC holders would be paid in U.S. dollars; a Canadian holder who wants Canadian dollars would still need a conversion or payment arrangement, and the banking route would shape the real cost. The 1% figure is a maximum, not a fixed rate. Circle's USDC terms for holders outside the European Economic Area, updated Oct. 15, make direct redemption conditional on a Circle Mint account in good standing, and Mint is limited to institutions and registered distributors that pass identity, sanctions and banking checks.
What the data shows
The headline numbers in the proposal: a 1% fee ceiling, three business days for standard redemptions, seven days' website notice before new or higher fees, a 60-day consultation running from the Oct. 24 publication date, a 30-day application window for existing issuers, and a planned start in fall 2027.
Background
The rules sit under the Stablecoin Act, which received royal assent on March 26 but has core provisions marked not in force; the government's impact statement points to fall 2027 for implementation. Once in force, the Act would require reserves at least equal to outstanding par value, held in the reference currency or qualifying liquid assets and separated from the claims of the issuer's and custodian's creditors. Allowed assets include demand deposits, short-term government debt, qualifying money-market funds and certain overnight repurchase agreements, and issuers could not describe their tokens as insured bank deposits. Existing issuers that apply within 30 days of the start date could keep issuing until a registration decision is made, though that relief would not suspend their redemption duties.
What is still unclear
Whether USDC would fall inside the framework is unresolved. Coverage would depend on purchaser-location criteria, where a buyer usually lives, has a head office or a principal place of business in Canada, rather than citizenship, and the Act reaches foreign as well as domestic issuers. The Governor of the Bank of Canada could grant exemptions, possibly with conditions, where provincial or foreign requirements are substantially similar. Circle's Mint page states that Circle National Trust provides custody and does not issue USDC, so the custodian's charter alone does not settle which entity would face Canadian rules.
What to watch
Final regulations, entity-level registration or exemption decisions and published payment arrangements will determine whether the direct route becomes a usable second exit, particularly when reserve-market liquidity is strained. The proposal does not specify when a recipient's external bank must make proceeds available, a separate issue from the issuer's own processing window.
Questions readers ask
Would holders be able to redeem any amount?
Under the draft, a small balance would no longer be a permitted reason to reject an otherwise covered request, so the minimum amount would effectively be removed for holders who meet the coverage criteria.
Could an issuer refuse to pay during market stress?
It could apply daily limits only when liquidity is short in the markets where its reserve assets trade, and the 1% fee ceiling would still apply. That exception is narrower than a general right to delay.
When would the rules take effect?
Core provisions of the Stablecoin Act are not yet in force, and the government's impact statement identifies fall 2027 as the intended implementation window. The consultation runs 60 days from Oct. 24.
