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Canada opens 60-day consultation on draft stablecoin rules that ban yield and require 1:1 reserves at Canadian institutions
Summary
Canada's government has opened a 60-day public consultation, running until Dec. 23, on draft regulations for stablecoins issued by non-financial institutions under its Stablecoin Act, CoinDesk and Cointelegraph reported.
The draft rules would bar those issuers from paying interest or yield, including through third parties, though CoinDesk said rewards linked to transactions would still be allowed.
Issuers would need reserves equal to their circulating tokens, held at qualified Canadian institutions, and would have to redeem within three business days with fees capped at 1%, both outlets reported.
The government said it intends the rules to take effect in fall 2027, after which non-bank issuers would have to register with the Bank of Canada before issuing a stablecoin, per Cointelegraph; the proposal cites aligning with the U.S. GENIUS Act and other regimes.
Updates
- Update, : Update: Decrypt also reported the 60-day consultation, highlighting the one-to-one reserve and fast-redemption requirements and the continued ban on paying holders interest.
Key facts
- Cointelegraph said the government gave notice of the consultation on Saturday; CoinDesk reported it on Monday, Oct. 26.
- Canada's Stablecoin Act was passed in March, according to Cointelegraph; CoinDesk said it passed earlier this year.
- The proposal says aligning with U.S. and other rules aims to 'reduce the overall regulatory burden on multi-jurisdictional issuers.'
- Reserves could be held at qualified Canadian institutions including banks, credit unions and trust companies.
- The Canadian Bankers Association has backed the act's prohibition on yield, while Coinbase Canada received Ontario Securities Commission permission this year to offer yields on eligible tokens.