The Rise of Regulated Stablecoins in Canada: QCAD Leads the Way
Recently we saw QCAD become Canada’s first fully compliant CAD stablecoin.
The Issuer, QCAD Digital Trust, has received final approval for its prospectus filed with Canadian Securities Administrators under Canada’s interim regulatory framework for value-referenced crypto assets (VRCAs).
As a reminder, QCAD is one of the few active CAD stablecoins, issued since its re-launch in 2023 by Stablecorp and Tetra Trust and available on Ethereum, Stellar, and Algorand chains.
This milestone arrives right as the Canadian federal government has announced its intention to introduce a nationwide regulatory framework for stablecoins, via the proposed Federal Stablecoin Act (Bill C-15, following the 2025 Federal Budget).
But what does a “compliant stablecoin” actually mean? 🤔
And why is this moment important for the future of digital money in Canada?
1. Reserve Quality & Segregation
Why It Matters:
Stablecoins must be fully backed 1:1 with high-quality liquid assets, held in segregated, bankruptcy-remote accounts. Prevents de-pegs and ensures safety.
Is this in Canada’s proposed Stablecoin Act (part of Bill C-15)?
✅ Yes. Act requires 1:1 reserves + qualified custodians + strict segregation.
2. Redemption Rights & Liquidity
Why It Matters:
Users must be able to redeem tokens at par value on demand - essential for confidence, liquidity, and consumer protection.
Is this in the proposed Act?
✅ Yes. Enforceable par-value redemption rights are mandatory.
3. Transparency, Audits & Disclosure
Why It Matters:
Regular attestations and disclosures prevent opaque reserve practices and build institutional trust.
Is this in the proposed Act?
✅ Yes. Requires public disclosures, audited financials, and ongoing reporting.
4. Issuer Licensing & Oversight
Why It Matters:
Ensures only qualified, supervised entities can issue stablecoins - reducing systemic risk and improving market integrity.
Is this in the proposed Act?
✅ Yes. Issuers must register and appear on a Bank of Canada public registry.
5. AML/KYC, Governance & Risk Controls
Why It Matters:
Prevents illicit activity and operational failures; ensures strong governance and security practices.
Is this in the proposed Act?
🟨 Yes, with nuance. AML/KYC is handled under FINTRAC MSB rules, while governance & operational controls are explicitly required within the Act.
6. Interest / Yield Restrictions
Why It Matters:
Prevents stablecoins from acting like deposit-taking instruments or shadow banks.
Is this in the proposed Act?
✅ Yes. The Act bans interest or yield on payment stablecoins.
7. Payment Providers & Foreign Issuers
Why It Matters:
Creates clarity for PSPs processing stablecoin payments and sets rules for foreign stablecoins entering the Canadian market.
Is this in the proposed Act?
🟨 Yes, with nuance. Retail Payment Activities Act (RPAA) amendments cover PSPs; foreign issuers may be exempt if it’s determined that they operate under a similarly stringent foreign regulatory environment; can otherwise operate in Canada only if fully compliant and registered.
