Stablecoin Act

An Act respecting stablecoins Short title This Act may be cited as the Stablecoin Act. Definitions The following definitions apply in this Act. Bank means the Bank of Canada. (Banque) Centre means the Financial Transactions and Reports Analysis Centre of Canada. (Centre) certified accountant means an individual who is a member in good standing of a professional body of accountants that is constituted by or under an Act of Parliament or a provincial or foreign law. (comptable certifié) digital asset means a digital representation of value that is recorded on a distributed ledger or a similar technology. (actif numérique) distributed ledger means a digital database that contains records of transactions among the users of a network and that uses cryptography to maintain the confidentiality, integrity, authenticity and non-repudiation of the data that is recorded in it. (registre distribué) fiat currency means a currency that is issued by a country and that is designated as legal tender in that country. (monnaie fiduciaire) financial institution means a financial institution, as defined in section 2 of the Bank Act, the corporation described in paragraph 983(4.2)(f) of that Act and any other person provided for in the regulations. (institution financière) government authority includes the Royal Canadian Mounted Police, the Communications Security Establishment and the Canadian Security Intelligence Service. (autorité administrative) Governor has the same meaning as in section 2 of the Bank of Canada Act. (gouverneur) incident means an event or series of related events that is unplanned by an issuer and that results in or could reasonably be expected to result in the reduction, deterioration or breakdown of any activity that is performed by the issuer or a third party and that is related to a stablecoin. (incident) issue, in respect of a stablecoin, means to create the stablecoin and to make it available for purchase, directly or indirectly, by a person in Canada. (émettre) issuer means a person that issues a stablecoin. (émetteur) lawyer means a lawyer who is a member in good standing of a law society of a province or a notary who is a member in good standing of the Chambre des notaires du Québec; and a lawyer who is a member in good standing of a professional body of lawyers that is constituted under a foreign law. (avocat) Minister means the Minister of Finance. (ministre) outstanding stablecoin means a stablecoin that an issuer has issued and that has been purchased and neither redeemed nor cancelled. (cryptomonnaie stable en circulation) person means an individual, a corporation, a trust, a joint venture, a partnership, a fund, an unincorporated association or organization and any other legal entity. (personne) personal information means information about an identifiable individual. (renseignement personnel) qualified custodian means a financial institution, and any other person provided for in the regulations, that meets any requirements provided for in the regulations. (dépositaire autorisé) reference currency means the fiat currency relative to which a stablecoin is intended or designed to maintain a stable value. (monnaie de référence) stablecoin means a digital asset that is intended or designed to maintain a stable value relative to the value of one fiat currency and that has the characteristics, if any, provided for in the regulations. (cryptomonnaie stable) third party means a person that, under an arrangement or agreement with an issuer, performs an activity that is related to the issuing or the redemption of a stablecoin issued by the issuer and that is not an employee of the issuer. (tiers) Securities — Acts of Parliament The issuing of a stablecoin in accordance with this Act does not constitute dealing in securities for the purposes of any of the following provisions: paragraphs 468(3)(b), 522.08(2)(b) and 930(3)(b) of the Bank Act; paragraphs 495(3)(b) and (5)(b), 554(3)(c) and 971(3)(b) of the Insurance Companies Act; and paragraph 453(3)(b) of the Trust and Loan Companies Act. Not business of accepting deposit liabilities The issuing of a stablecoin in accordance with this Act does not constitute engaging in the business of accepting deposit liabilities for the purposes of any of the following provisions: subsections 468(3) and 930(3) and paragraph 948(1)(a) of the Bank Act; subsections 495(3) and (5), 554(3) and 971(3) of the Insurance Companies Act; and subsection 453(3) of the Trust and Loan Companies Act. Business of dealing in virtual currencies An issuer is a person that is engaged in the business of dealing in virtual currencies for the purposes of subparagraphs 5(h)(iv) and (h.1)(iv) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Objects The Bank’s objects under this Act are to supervise issuers in order to determine whether they are in compliance with this Act; promote the adoption by issuers of policies and procedures that are designed to implement their duties under this Act; and monitor and evaluate trends and issues related to stablecoins. Agreements or arrangements The Bank may, for the purpose of exercising its powers or performing its duties and functions under this Act, enter into an agreement or arrangement with any government authority or regulatory body. Guidelines — Bank Subject to subsection (2), the Bank may issue guidelines respecting the manner in which this Act is to be applied. Guidelines — Minister The Minister may issue guidelines respecting the manner in which the provisions of this Act that confer powers, duties or functions on the Minister are to be applied. Delegation of Governor’s powers, duties and functions The Governor may delegate to an officer of the Bank any of the Governor’s powers, duties or functions under this Act. Interprovincial or international applications This Act applies only in respect of a stablecoin that has or could reasonably be expected to have interprovincial or international applications. Closed-loop stablecoin Subject to the regulations, this Act does not apply in respect of a closed-loop stablecoin. Issuers Subject to the regulations, this Act does not apply to an issuer that is a financial institution. Central bank This Act does not apply to an issuer that is a central bank. Governor’s order If the Governor is of the opinion that a provincial or foreign law or a provision of a provincial or foreign law applies to or in respect of an applicant or a class of applicants or an issuer or a class of issuers and that the provincial or foreign law or the provision of the provincial or foreign law is substantially similar to this Act or the regulations or a provision of this Act or the regulations, then the Governor may, by order, specify that this Act or the regulations, or any provision of this Act or the regulations, does not apply to or in respect of the applicant, the issuer or the class of applicants or issuers, subject to any conditions that the Governor considers appropriate. Prohibition — issuing A person must not issue a stablecoin unless the person complies with this Act and their name is included in the list of issuers referred to in paragraph 16(a). Registry The Bank must maintain a public registry that contains a list of issuers, including any information provided for in the regulations; subject to section 76, information respecting each order made under section 14, directive given under subsection 27(1), order made under section 60, order made under section 61, compliance agreement entered into under section 62, direction made under subsection 63(1) or (3), direction made under section 66, if the Bank considers it appropriate to include that information in the registry, order made under subsection 74(1) or (3); the information that is made public under section 92; and any other information provided for in the regulations. Application required A person must submit an application to the Bank in order to have their name added to the list of issuers referred to in paragraph 16(a). Contents of application An application must contain the following information: information about the ownership of the applicant; a description of how the applicant is organized and structured and, if applicable, information about the applicant’s subsidiaries, affiliates and third parties; a description of the technological systems that are used or that will be used by the applicant or any third parties in relation to the stablecoin that the applicant plans to issue, including the distributed ledgers, any smart contracts or computer code with respect to the issuing or redemption of the stablecoin and any other technological infrastructure through which the stablecoin will be issued or redeemed; the applicant’s redemption policy; a description of the measures that the applicant has taken or plans to take to comply with sections 37 to 39; a statement from a lawyer of whether, in the lawyer’s opinion, the measures referred to in paragraph (e) enable the applicant to comply with sections 38 and 39; a statement from a certified accountant of the applicant’s financial condition; the applicant’s governance policy, risk management policy, data security policy and recovery and resolution policy; information about any enforcement actions that have been taken in relation to the applicant under a federal, provincial or foreign law that relates to anti-money laundering or anti-terrorist financing measures, the provision of financial services, securities and derivatives, market conduct or consumer protection; any information requested by the Bank; and any information provided for in the regulations. Statement — lawyer The statement referred to in paragraph (2)(f) must be prepared by a lawyer who, within the meaning of the regulations, is independent of the applicant and any related party of the applicant and meets any other requirements provided for in the regulations. Statement — certified accountant The statement referred to in paragraph (2)(g) must be prepared by a certified accountant who, within the meaning of the regulations, is independent of the applicant and any related party of the applicant and meets any other requirements provided for in the regulations. Fee An applicant must include with the application a fee that is determined by the Bank. Information requested by Bank An applicant must provide the Bank with any information that the Bank requests in relation to the application, within the time and in the manner provided for in the regulations, if any. Notice of change An applicant must notify the Bank of any change to any information that was provided to the Bank, within the time and in the manner provided for in the regulations, if any. The Bank must then notify the Minister and any designated person or government authority. Application complete As soon as feasible after the Bank is of the opinion that an application is complete, the Bank must provide the Minister and any designated person or government authority, for the purpose of enabling them to assist the Minister in exercising the Minister’s powers and performing the Minister’s duties and functions under this Act, with the completed application; provide the Centre with the completed application for the purpose of enabling the Centre to carry out its objects under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act; and notify the applicant that the application is complete. Decision to review application The Minister may, within the period provided for in the regulations, decide to review an application if the Minister is of the opinion that it is necessary to do so for reasons related to national security. If the Minister decides to review an application, the Minister must notify the Bank and the Bank must then notify the applicant. Extension of period The Minister may extend the period for one or more periods provided for in the regulations if the Minister considers it necessary to do so and notifies the Bank. In that case, the Bank must notify the applicant of the extension. Bank not authorized to add name to list The Bank must not add the applicant’s name to the list of issuers referred to in paragraph 16(a) during a period referred to in subsection 21(1) or (2) unless the Minister informs the Bank that the Minister has decided not to review the application. Time for review If the Minister decides to review an application, the Minister must conduct the review within the period provided for in the regulations. The Minister may extend the period for conducting the review for one or more periods provided for in the regulations if the Minister considers it necessary to do so and notifies the Bank. In that case, the Bank must notify the applicant of the extension. If the Minister notifies the Bank that the Minister has decided to review an application, the Bank must not add the applicant’s name to the list of issuers referred to in paragraph 16(a) unless the Minister notifies the Bank that the Minister has decided not to give a directive under subsection 27(1). Notice to Bank The Minister must notify the Bank if, after completing a review of an application, the Minister decides not to give a directive under subsection 27(1). Additional information An applicant must provide the Minister and any designated person or government authority with any additional information that the Minister or the designated person or government authority requests in relation to the applicant or the activities that the applicant performs or plans to perform in relation to a stablecoin. Manner A request for information under subsection (1) must be submitted to the Bank, which must then transmit it to the applicant. The applicant must provide the requested information to the Bank, which must then transmit it to the Minister and the designated person or government authority. Directive to refuse application The Minister may, for any of the following reasons, give a directive to the Bank to refuse an application: there are reasons related to national security; the applicant has failed to provide additional information in accordance with section 26; an order made under section 70, or an undertaking required under that section, that relates to the application has not been complied with; a condition imposed under section 71 that relates to the application has not been complied with; the applicant has provided false or misleading information to the Bank, the Minister or any designated person or government authority; any other reason provided for in the regulations. Representations The Minister must not give a directive to the Bank to refuse an application unless the applicant is provided with an opportunity to make representations to the Minister in respect of the matter. Refusal of application If the Minister gives a directive to the Bank to refuse an application, the Bank must refuse the application and, as soon as feasible, notify the applicant that the application has been refused. Name added to list If the Minister notifies the Bank that the Minister has decided not to give a directive to refuse an application, the Bank must, as soon as feasible, add the applicant’s name to the list of issuers referred to in paragraph 16(a) and notify the applicant. False or misleading information An issuer must not communicate or otherwise provide false or misleading information to the public. Prohibition An issuer must not use terms, expressions, logos, symbols or illustrations provided for in the regulations; or use, in a manner that is contrary to the regulations, terms, expressions, logos, symbols or illustrations provided for in the regulations. An issuer must not, directly or indirectly, grant or pay to the holder of a stablecoin that the issuer has issued any form of interest or yield in respect of that stablecoin, whether in cash, digital assets or other consideration. An issuer must not issue a stablecoin if, in Canada or a foreign jurisdiction, the stablecoin is legal tender; a deposit or proof of a deposit; or insured under a public deposit insurance system or guaranteed or backstopped by a government. An issuer must not represent a stablecoin in a manner that suggests that the stablecoin is Redemption An issuer must redeem outstanding stablecoins in the reference currency, at par value and in accordance with the regulations, if any. Redemption policy An issuer must, in accordance with the regulations, if any, establish and make publicly available a policy respecting the redemption of outstanding stablecoins that contains the conditions that apply to redemption, including with respect to the manner and timing of redemption and any fees or charges that may be payable to the issuer or any other person; a description of the roles of any third parties; and Policy provided to Bank An issuer must provide the Bank with the redemption policy. Duty to maintain reserve An issuer must, in accordance with the regulations, if any, maintain a reserve of assets that has a value that is equal to or greater than the par value of outstanding stablecoins. Use of assets Subject to the regulations, an issuer must not use the assets in the reserve of assets for a purpose other than to redeem outstanding stablecoins. Composition The reserve of assets must be composed exclusively of the reference currency or other high-quality liquid assets that are denominated in the reference currency; and provided for in the regulations or, if no regulations are made, approved by the Bank. No encumbrance Subject to the regulations, an issuer must not pledge as collateral, create a security or a security interest in or otherwise encumber the assets in the reserve of assets. Qualified custodian — placement of assets An issuer must, in accordance with the regulations, if any, place the assets in the reserve of assets with one or more qualified custodians. Holding of assets An issuer must, in accordance with the regulations, if any, ensure that each qualified custodian holds the assets in the reserve of assets in a manner that ensures that the assets are segregated from the qualified custodian’s own assets and the issuer’s other assets; in a manner that ensures that the assets are not available to satisfy creditors of the qualified custodian or the issuer, including under the Bankruptcy and Insolvency Act or a provincial or foreign law dealing with bankruptcy and insolvency, other than to satisfy any claims of the holders of a stablecoin with respect to the redemption of the stablecoin; and in accordance with the regulations, if any. Governance policy An issuer must, in accordance with the regulations, if any, establish, implement and maintain a governance policy that describes the roles and responsibilities of the members of the issuer’s governing body and senior management with respect to all activities related to a stablecoin that it issues; the measures that the issuer has put in place to ensure accountability and oversight with respect to all activities related to a stablecoin that it issues; the roles of third parties and the policies and procedures the issuer has established to identify and manage conflicts of interest; and any other matter provided for in the regulations. Risk management policy An issuer must, in accordance with the regulations, if any, establish, implement and maintain a risk management policy that describes the measures that it has put in place to ensure operational resilience, incident response, continuity of critical functions and recovery from disruptions; identify and manage risks related to third parties; implement cybersecurity safeguards to protect the issuer’s systems and data against unauthorized access, disruption or misuse; identify and manage risks related to money laundering and terrorist financing; and address any other matter provided for in the regulations. Data security policy An issuer must, in accordance with the regulations, if any, establish, implement and maintain a data security policy that describes the measures that it has put in place to protect personal information, in a manner that is appropriate to the sensitivity of the information, against loss or theft or unauthorized access, disclosure, copying, use or modification; the data that the issuer collects, retains or reports under this Act against loss or theft or unauthorized access, disclosure, copying, use or modification; and any other data provided for in the regulations. Recovery and resolution policy An issuer must, in accordance with the regulations, if any, establish, implement and maintain a recovery and resolution policy that describes the measures that it has put in place to ensure an orderly resolution or winding down of the issuer’s activities in relation to the stablecoin that it issues, including with respect to the redemption of outstanding stablecoins and the protection of stablecoin holders’ claims to the reserve of assets; and Policies available An issuer must provide the Bank with the policies referred to in sections 40 to 43 and make them publicly available in accordance with the regulations, if any. Information publicly available An issuer must, in accordance with the regulations, if any, make any information that is provided for in the regulations publicly available. Report An issuer must provide the Bank with a report that contains a statement from a certified accountant of the issuer’s financial condition, the number of outstanding stablecoins, the composition of the issuer’s reserve of assets and the fair market value of the assets in the reserve, and whether, in the certified accountant’s opinion, the reserve of assets satisfies the requirements of subsections 37(1) and (3); a statement from a lawyer of whether, in the lawyer’s opinion, the issuer is in compliance with sections 38 and 39; and Time and manner Subject to subsection (3), an issuer must provide the Bank with the report within the time and in the manner provided for in the regulations or, if no regulations are made, within the time and in the manner determined by the Bank. Monthly statement An issuer must provide the Bank with the information referred to in subparagraphs (1)(a)(i) to (iii) at least once every month. Report publicly available An issuer must, in accordance with the regulations, if any, make the report publicly available, except for the information provided for in the regulations. Statement of lawyer At the Bank’s request and within the time and in the manner determined by the Bank, an issuer must provide the Bank with a statement from a lawyer of whether, in the lawyer’s opinion, the issuer is in compliance with sections 38 and 39. Certified accountant The statement referred to in paragraph 46(1)(a) must be prepared by a certified accountant who, within the meaning of the regulations, is independent of the issuer and any related party of the issuer and meets any other requirements provided for in the regulations. Lawyer The statements referred to in paragraph 46(1)(b) and section 47 must be prepared by a lawyer who, within the meaning of the regulations, is independent of the issuer and any related party of the issuer and meets any other requirements provided for in the regulations. Notice of incident If an issuer becomes aware of an incident, the issuer must, without delay, notify the Bank and the Bank must then notify the Minister and any designated person or government authority. Notice The notice must be given in accordance with the regulations, if any, and contain any information provided for in the regulations. Notice of significant change An issuer must, in accordance with the regulations, if any, notify the Bank of any significant change to any information that was provided to the Bank. The Bank must then notify the Minister and any designated person or government authority, in accordance with the regulations, if any. Retention, use and disposal An issuer must retain, use and dispose of personal information, and any other information provided for in the regulations, in accordance with the regulations, if any. A person must not provide false or misleading information to the Bank, the Minister or any designated person or government authority. Bank to ascertain expenses The Bank must, before September 30 in each year, ascertain the total amount of expenses incurred by it during the immediately preceding calendar year for or in connection with the administration of this Act and deduct from that amount any fees paid to it under subsection 17(5) in that preceding calendar year. Amount conclusive The amount ascertained is final and conclusive for the purposes of this section. Assessment As soon as feasible after ascertaining the amount, the Bank must assess a portion of the total amount of expenses against each issuer. Interim assessment The Bank may, during each calendar year, prepare an interim assessment against any issuer. Assessment is binding Every assessment and interim assessment is final and conclusive and binding on the issuer against which it is made. Recovery Every assessment and interim assessment constitutes a debt due to the Bank, is immediately payable and may be recovered as a debt in any court of competent jurisdiction. Interest Interest may be charged on the unpaid amount of an assessment or interim assessment at a rate equal to 2% plus the rate in effect that is prescribed under the Income Tax Act for amounts payable by the Minister of National Revenue as refunds of overpayments of tax under that Act. Information request The Bank may request in writing that an issuer provide the Bank, within the time provided for in the regulations, if any, with any information that the Bank considers necessary for the purposes of subsection 53(3) or (4). Compliance with request The issuer must comply with the request. Information obtained by Bank Subject to subsections (2) and (3), information that is obtained under this Act by the Bank and any information prepared from that information is confidential and the Bank must treat it accordingly. Disclosure permitted — this Act The Bank may disclose information that is obtained under this Act if it does so in accordance with section 16 or 92. Disclosure permitted The Bank may disclose information that is obtained under this Act to the Minister, any designated person or government authority or the Centre or to any government authority or regulatory body that agrees to treat the information as confidential. Information obtained by Minister Subject to subsection (2), information that is obtained under this Act by the Minister or any designated person or government authority, and any information prepared from that information, is confidential and the Minister or the designated person or government authority must treat it accordingly. The Minister or the designated person or government authority may disclose information that is obtained under this Act to a government authority or regulatory body that agrees to treat the information as confidential. Evidentiary privilege Information provided for in the regulations in relation to the supervision of issuers must not be used as evidence in any civil proceedings and is privileged for that purpose. No testimony or production A person must not by an order of any court, tribunal or other body be required in any civil proceedings to give oral testimony or to produce any document relating to any information referred to in subsection (1). Exception to subsection (1) Despite subsection (1), the Minister, the Governor, the Bank or the Attorney General of Canada may, in accordance with the regulations, if any, use information referred to in that subsection as evidence in any proceedings. Despite subsection (1), an issuer may, in accordance with the regulations, if any, use information referred to in that subsection as evidence in any proceedings in relation to the administration or enforcement of this Act, the Bankruptcy and Insolvency Act or the Companies’ Creditors Arrangement Act that are commenced by the issuer, the Minister, the Governor, the Bank or the Attorney General of Canada. Exceptions to subsections (1) and (2) Despite subsections (1) and (2), a court, tribunal or other body may, by order, require the Minister, the Governor, the Bank or an issuer to give oral testimony or to produce any document relating to any information referred to in subsection (1) in any civil proceedings in relation to the administration or enforcement of this Act that are commenced by the Minister, the Governor, the Bank, the Attorney General of Canada or an issuer. No waiver The disclosure of any information referred to in subsection (1), other than under subsection (3), (4) or (5), does not constitute a waiver of the privilege referred to in subsection (1). No liability if good faith — Bank No action lies against His Majesty in right of Canada, any officer, employee or director of the Bank or any person acting under the direction of the Governor for anything done or omitted to be done in good faith in the administration or discharge of any powers or duties that under this Act are intended or authorized to be executed or performed. No liability if good faith — Minister No action lies against His Majesty in right of Canada, the Minister or any person or government authority acting under the direction of the Minister for anything done or omitted to be done in good faith in the administration or discharge of any powers or duties that under this Act are intended or authorized to be executed or performed. The Bank may request in writing that a person, within the time and in the manner provided for in the regulations, if any, provide the Bank with any information that the Bank considers necessary for a purpose related to verifying compliance with this Act or carrying out the Bank’s objects under this Act. The person must comply with the request. Undertakings The Bank may, by order, require an applicant or an issuer, or any director, officer or agent or mandatary of an applicant or issuer, to provide an undertaking if the Bank is of the opinion that it is necessary to do so to ensure compliance with this Act. Conditions The Bank may, by order, impose conditions on an applicant or an issuer, or any director, officer or agent or mandatary of an applicant or issuer, if the Bank is of the opinion that it is necessary to do so to ensure compliance with this Act. Compliance agreement The Bank may enter into a compliance agreement with an issuer for the purpose of implementing any measure that is designed to further compliance by the issuer with this Act. Directions — failure to comply If, in the Bank’s opinion, an applicant or an issuer has failed to comply, or there are reasonable grounds to believe that an applicant or an issuer will fail to comply, with a provision of this Act or of the regulations or with an order made under section 14, an undertaking required under section 60, conditions imposed under section 61 or a compliance agreement entered into under section 62, the Bank may direct the applicant or the issuer to comply and to take any measures that, in the Bank’s opinion, are necessary to do so. Subject to subsection (3), the Bank must not make a direction unless the applicant or the issuer in question is provided with an opportunity to make representations in respect of the matter. Temporary direction If the Bank is of the opinion that the length of time required for representations to be made might be prejudicial to the public interest, the Bank may make a temporary direction that has effect for a period of not more than 15 days. Continued effect The temporary direction continues to have effect after the end of the 15-day period if no representations are made to the Bank within that period or, if representations are made, the Bank notifies the applicant or the issuer in question that the Bank is not satisfied that there are sufficient grounds for revoking the direction. Recommendation to Minister The Bank may recommend to the Minister that the Minister make an order under subsection 74(1) prohibiting an issuer from issuing a stablecoin if the Bank is satisfied that the issuer has contravened this Act or the regulations or that the issuer is committing an act or pursuing a course of conduct that is an unsafe or unsound practice in relation to its business. Regulations and guidelines The Governor in Council may make regulations and the Bank may make guidelines respecting the maintenance by issuers of sound operational, governance and risk management practices. Directions — unsafe or unsound practice If the Bank is of the opinion that an issuer, or a person with respect to an issuer, is committing or is about to commit an act that is an unsafe or unsound practice in relation to the business of the issuer, or is pursuing or is about to pursue any course of conduct that is an unsafe or unsound practice in relation to that business, the Bank may direct the issuer or person to cease or refrain from committing the act or pursuing the course of conduct; and perform any act that, in the Bank’s opinion, is necessary to remedy the situation. Designation The Minister may designate a person or government authority for the purposes of section 19, paragraph 20(a), section 26, paragraph 27(1)(e), subsection 49(1), sections 50 and 52, subsection 55(3) and sections 56 and 68. The Minister or any designated person or government authority may request in writing that a person, within the time and in the manner provided for in the regulations, if any, provide the Minister and the designated person or government authority with any information that the Minister or the designated person or government authority considers necessary for a purpose related to the exercise of the Minister’s powers or the performance of the Minister’s duties and functions under this Act. A request for information under subsection (1) must be submitted to the Bank, which must then transmit it to the person. The person must provide the requested information to the Bank, which must then provide it to the Minister and the designated person or government authority. Authorized persons The Minister may designate persons or classes of persons as authorized persons for the purpose of this section. An authorized person may request in writing that a person, within the time and in the manner provided for in the regulations, if any, provide the authorized person with any information that the authorized person considers necessary for a purpose related to verifying compliance with an undertaking required under section 70, conditions imposed under section 71 or an order made under subsection 72(1) or (3). A request for information under subsection (2) must be submitted to the Bank, which must then transmit it to the person. The person must provide the requested information to the Bank, which must then provide it to the authorized person. The Minister may, by order, require an applicant or an issuer, or any director, officer or agent or mandatary of an applicant or issuer, to provide an undertaking if the Minister is of the opinion that it is necessary to do so for reasons related to national security. The Minister may, by order, impose conditions on an applicant or an issuer, or any director, officer or agent or mandatary of an applicant or issuer, if the Minister is of the opinion that it is necessary to do so for reasons related to national security. National security order The Minister may, by order, direct an applicant or an issuer, or any director, officer or agent or mandatary of an applicant or issuer, to take or to refrain from taking any measures related to its activities in respect of a stablecoin if the Minister is of the opinion that it is necessary to do so for reasons related to national security. Subject to subsection (3), the Minister must not make an order under subsection (1) unless the applicant, issuer or person in question is provided with an opportunity to make representations in respect of the matter. Temporary order If, in the Minister’s opinion, the length of time required for representations to be made might be prejudicial to the public interest, the Minister may make a temporary order that has the same effect as an order made under subsection (1). The temporary order ceases to have effect 30 days after the day on which it is made or after the end of a shorter period that is specified in the order. The temporary order continues to have effect after the end of the 30-day or the shorter period if no representations are made to the Minister within that period or, if representations are made, the Minister notifies the applicant, issuer or person in question that the Minister is not satisfied that there are sufficient grounds for revoking the order. Order provided to Bank The Minister must provide the Bank with each order made under section 70 or 71 or subsection 72(1) or (3) and the Bank must then, as soon as feasible, provide the applicant, issuer or person in question with the order. Prohibition against issuing stablecoin The Minister may, by order, prohibit an issuer from issuing a stablecoin if the Minister is of the opinion that it is necessary to do so for reasons related to national security or that it is in the public interest to do so. Subject to subsection (3), the Minister must not make an order under subsection (1) unless the issuer in question is provided with an opportunity to make representations in respect of the matter. The temporary order continues to have effect after the end of the 30-day or the shorter period if no representations are made to the Minister within that period or, if representations are made, the Minister notifies the issuer in question that the Minister is not satisfied that there are sufficient grounds for revoking the order. As soon as feasible after making an order under subsection 74(1) or (3), the Minister must provide the order to the Bank. The Bank must then, as soon as feasible, provide the issuer in question with the order and then remove the issuer’s name from the list of issuers referred to in paragraph 16(a). Confidential information If the Minister is of the opinion that the disclosure of information about a directive given, undertaking required, conditions imposed or order made by the Minister under this Act, or information that could reveal the existence of the directive, undertaking, conditions or order, could pose a threat to the integrity or security of the applicant or issuer in question or could be injurious to national security, the Minister may specify that the information is confidential and must be treated accordingly. Despite anything in this Act, it is prohibited for any person to disclose any confidential information referred to in subsection (1) except in accordance with any conditions that the Minister may specify. Governor If a person is contravening or has contravened a provision of this Act or the regulations or is not complying with an undertaking required, conditions imposed or directions made by the Bank under this Act or with an order made by the Governor under this Act, the Governor may, in addition to any other action that may be taken under this Act, apply to a superior court for an order requiring the person to cease the contravention or to comply with the provision, undertaking, conditions, directions or order. Minister If a person is not complying with an undertaking required, conditions imposed or an order made by the Minister under this Act, the Minister may, in addition to any other action that may be taken under this Act, apply to a superior court for an order requiring the person to comply with the undertaking, conditions or order. Powers of court The court may make the order and any other order that it thinks fit. Appeal An appeal from an order of the court lies in the same manner and to the same court as an appeal from any other order of the court. Right of appeal An applicant that has been notified of a decision under section 28 or an issuer that has been provided with an order under section 75 may, within the period provided for in the regulations or within any longer period that the Federal Court allows, appeal the decision or the order to that Court. Powers of Federal Court The Federal Court may dismiss the appeal; or set aside the decision or order and refer the matter back to the Minister for re-determination. Violation Every contravention that is designated under the regulations constitutes a violation and the person that commits the violation is liable to a penalty determined in accordance with the regulations. Notice of violation If the Bank believes on reasonable grounds that a person has committed a violation, the Bank may issue and cause to be served on the person a notice of violation. Purpose of penalty The purpose of a penalty is to promote compliance with this Act and not to punish. Contents of notice A notice of violation must name the person believed to have committed a violation, identify the violation and set out the penalty to be paid; the right of the person, within 30 days after the day on which the notice is served or within any longer period that the Bank specifies, to pay the penalty or to make representations to the Governor with respect to the violation and the penalty, and the manner for doing so; and the fact that, if the person does not pay the penalty or make representations in accordance with the notice, the person will be deemed to have committed the violation and is liable to pay the penalty. Short-form descriptions The Bank may establish, in respect of each violation, a short-form description to be used in notices of violation. Administrative corrections If a notice of violation contains any error or omission, the Bank may issue and cause to be served a corrected notice of violation on the person at any time during the period referred to in paragraph (1)(b). Payment of penalty If the person pays the penalty set out in the notice of violation, the person is deemed to have committed the violation and proceedings in respect of it are ended. Decision If the person makes representations in accordance with the notice, the Governor must decide, on a balance of probabilities, whether the person committed the violation and, if so, may, subject to the regulations, impose the penalty set out in the notice, a lesser penalty or no penalty. Failure to pay or make representations A person that neither pays the penalty set out in the notice nor makes representations in accordance with the notice is deemed to have committed the violation and is liable to pay the penalty set out in the notice. Notice of decision and right of appeal The Bank must cause notice of any decision made under subsection (2) or the penalty that the person is liable to pay under subsection (3) to be issued and served on the person together with notice of the right of appeal under subsection 83(1). A person on which a notice of a decision made under subsection 82(2) is served may, within 30 days after the day on which the notice is served or within any longer period that the Federal Court allows, appeal the decision to that Court. Appeal — no notice of decision If the Bank does not cause notice of a decision to be issued and served under subsection 82(4) within 90 days after the day on which representations under subsection 82(2) were made, the person may appeal the penalty set out in the notice of violation to the Federal Court within 30 days after the day on which the 90-day period ends. On an appeal, the Federal Court may confirm, set aside or, subject to any regulations made under paragraph 93(z.4) or (z.5), vary the decision. For greater certainty For greater certainty, a violation is not an offence and, accordingly, section 126 of the Criminal Code does not apply in respect of a violation. Due diligence Due diligence is a defence in a proceeding in relation to a violation. Common law principles Every rule and principle of the common law that renders any circumstance a justification or excuse in relation to a charge for an offence applies in respect of a violation to the extent that it is consistent with this Act. Liability A person is liable for a violation that is committed by any of the person’s employees, third parties or agents or mandataries acting in the course of their employment, their contract or the scope of their authority, whether or not the employee, third party or agent or mandatary that actually committed the violation is identified. Debts due to His Majesty The following amounts constitute a debt due to His Majesty in right of Canada that may be recovered in the Federal Court or any other court of competent jurisdiction: the amount of the penalty set out in a notice of violation, beginning on the day on which it is required to be paid in accordance with the notice, unless representations are made in accordance with the notice or the decision is appealed; if representations are made, the amount of the penalty that is imposed by the Governor, beginning on the day specified by the Governor or, if no day is specified, beginning on the day on which the decision is made; the amount of a penalty determined by the Federal Court under subsection 83(3), beginning on the day on which the period specified in the decision for the payment of that amount ends or the day specified in the decision; and the amount of any costs and expenses referred to in subsection (3). Limitation period or prescription Proceedings to recover a debt referred to in subsection (1) may be commenced no later than the fifth anniversary of the day on which the debt becomes payable. A person that is liable to pay an amount referred to in any of paragraphs (1)(a) to (c) is also liable for the amount of any costs and expenses incurred in attempting to recover that amount. Receiver General A debt referred to in subsection (1) that is paid or recovered is payable to and must be remitted to the Receiver General. Certificate The unpaid amount of any debt referred to in subsection 87(1) may be certified by the Governor. Registration in Federal Court Registration in the Federal Court of a certificate has the same effect as a judgment of that Court for a debt of the amount specified in the certificate and all related registration costs. No notice of violation is to be issued after the second anniversary of the day on which the Bank becomes aware of the acts or omissions that constitute the alleged violation. Certification by Bank A document purporting to have been issued by the Bank, certifying the day on which the acts or omissions that constitute the alleged violation became known to the Bank, is admissible in evidence without proof of the signature or official character of the person appearing to have signed the document and, in the absence of evidence to the contrary, is proof that the Bank became aware of the acts or omissions on that day. Evidence In a proceeding in respect of a violation, a notice of violation purporting to be issued under subsection 80(1), a notice of decision purporting to be issued under subsection 82(4) or a certificate purporting to be made under subsection 88(1) is admissible in evidence without proof of the signature or official character of the person appearing to have signed it. Publication Subject to section 76 and the regulations, the Bank must make public the nature of a violation, the name of the person that committed it and the amount of any penalty imposed. Reasons Subject to section 76, in making public the nature of a violation, the Bank may include the reasons for its decision to issue the notice of violation and any related decision, including the relevant facts, analysis and considerations that formed part of the decision.

Governor in Council The Governor in Council may make regulations generally for carrying out the purposes and provisions of this Act, including regulations defining any term that is used in the definition incident, issue, outstanding stablecoin, stablecoin or third party in section 2 but that is not defined in this Act; respecting the exclusion under section 11, including to specify the circumstances in which the exclusion does not apply and to define “closed-loop stablecoin”; respecting the exclusion under section 12, including to specify the circumstances in which it does not apply; respecting factors that the Governor may or must take into account for the purposes of section 14; respecting the public registry referred to in section 16; respecting the application referred to in section 17; respecting the notice referred to in section 19; respecting factors that the Bank may or must take into account for the purposes of section 20; respecting the prohibitions under sections 30 to 34; respecting the duty to redeem under section 35; respecting the redemption policy referred to in section 36; respecting the reserve of assets referred to in section 37; respecting the prohibition under section 38; respecting the duties under section 39; respecting the governance policy referred to in section 40; respecting the risk management policy referred to in section 41; respecting the data security policy referred to in section 42; respecting the recovery and resolution policy referred to in section 43; respecting the duties referred to in sections 44 and 45; respecting the report referred to in section 46; respecting the statement referred to in section 47; respecting the notice referred to in section 49; respecting the notice referred to in section 50 and defining “significant change” for the purposes of that section; respecting the duty to retain, use and dispose of information under section 51; respecting the assessment of fees for the purposes of subsections 53(3) and (4); prohibiting, limiting or restricting the disclosure by issuers of information referred to in section 57; respecting the exercise of the Bank’s power under section 66; designating as a violation the contravention of a specified provision of this Act or the regulations or the non-compliance with orders made, undertakings required, compliance agreements entered into or directions made under this Act; classifying each violation as a minor violation, a serious violation or a very serious violation, classifying a series of minor violations as a serious violation or a very serious violation or classifying a series of serious violations as a very serious violation; establishing a penalty or a range of penalties in respect of a violation; if a range of penalties is established by regulations, setting out the method of establishing the amount payable as the penalty for the violation, including the criteria to be taken into account; respecting the service of documents, including the manner and proof of service and the circumstances under which documents are considered to be served; respecting the keeping and retention of records; providing for the circumstances in which the Bank must not make public, under subsection 92(1), the name of the person that committed a violation; and providing for anything that by this Act is to be provided for in the regulations. Transitional matters The Governor in Council may make any regulations that the Governor in Council considers necessary to provide for any transitional matter arising from the coming into force of this Act, including to provide that all or a portion of this Act does not apply for a period provided for in the regulations, to an issuer that was issuing a stablecoin on the day before the day on which section 15 comes into force. Classes Regulations made under section 93 or 94 may distinguish among different classes of issuers or stablecoins. Statutory Instruments Act The Statutory Instruments Act does not apply in respect of an order made under section 14; a directive given under subsection 27(1); an order made under section 60 or 61; a direction made under subsection 63(1) or (3); a direction made under section 66; an order made under section 70 or 71; an order made under subsection 72(1) or (3); and an order made under subsection 74(1) or (3). Order in council The provisions of this Act come into force on a day or days to be fixed by order of the Governor in Council. [Note: Act not in force.]