GI-2026-43-reg1: Stablecoin Regulations

Two main groups are affected: an estimated 5 stablecoin issuers (including existing players like Stablecorp's QCAD and Circle's USDC, plus likely new entrants) and approximately 30 payment service providers such as crypto-asset trading platforms with custodial wallets, software wallets, and crypto payment processors that are not already regulated under the RPAA. Issuers face an average annual compliance cost of about $17,700 per business, covering registration, reserve monitoring at a Canadian-incorporated custodian, four written policies (governance, risk management, data security, recovery/resolution) that must be reviewed yearly and independently audited every three years, monthly reports with certified accountant sign-off, complaint handling within 30 days, and a Bank of Canada supervision fee estimated at $2.5 million annually shared across all registered issuers on a tiered basis (Tier 1 issuers over $1B in outstanding stablecoins pay a $750,000 base fee plus 75% of remaining recoverable costs). The 30 newly-scoped PSPs face an average annual cost of about $5,071 each, primarily to set up operational risk management and fund-safeguarding frameworks. Issuers are also prohibited from paying holders interest or yield on stablecoin balances, though transaction-based rewards are permitted, and redemption fees are capped at 1% of the redeemed amount with at least 7 days' notice before any fee increase.