Canada opens consultation on draft stablecoin rules with yield ban
CIE News ·
Based on reporting by CoinDesk; not yet independently confirmed.
Canada began a 60-day consultation on draft rules requiring non-bank stablecoin issuers to back tokens 1:1 at domestic institutions, settle redemptions in three days, and avoid yield payouts.
The Canadian government has started a 60-day public consultation running until December 23 on proposed stablecoin rules, CoinDesk reported. The draft framework would require non-bank issuers to back their fiat-pegged tokens 1:1 with reserves placed at qualified Canadian financial institutions, including banks, credit unions, and trust companies. Issuers would also need to settle token redemptions in conventional currency within three business days, with redemption fees capped at 1%.
According to CoinDesk, the proposals maintain a ban on paying interest or yield to stablecoin holders, including payments distributed through third parties, though transaction-based rewards would remain permitted. The regulations build on the Stablecoin Act passed earlier this year and will specify registration requirements with the Bank of Canada. The federal regulatory framework is expected to take effect toward the end of 2027.
Key facts
- 60-day public consultation
- 1:1 reserve backing required
- 3-day redemption settlement limit
- Direct and indirect yields banned