UPDATE: Canada reveals reserve rules and penalty caps in stablecoin draft
CIE News ·
Update to Canada opens consultation on draft stablecoin rules with yield ban
Based on reporting by Decrypt; not yet independently confirmed.
Canada's draft stablecoin rules propose 1M to 10M CAD penalties for severe violations and cap redemption fees at 1%, following earlier plans for 1:1 reserve backing.
Canada's proposed stablecoin regulations would penalize severe violations by up to 10 million Canadian dollars and cap redemption fees at 1%, according to draft rules published in the Canada Gazette reported by Decrypt and CoinDesk. The framework details specific requirements following earlier reports of the government's consultation on the Stablecoin Act.
Under the proposals, issuers must hold 1:1 reserves in cash, government debt maturing in three months or less, or qualified money market funds. These assets must be held by a Canadian custodian in bankruptcy-remote accounts. Issuers are also required to process redemptions of any amount within three business days.
The framework maintains a ban on direct or indirect yield payouts to holders, while allowing rewards tied to coin usage, according to the reports. The government opened a 60-day consultation period ending December 23, with the final regulations slated to come into force in fall 2027.
Key facts
- 1M to 10M CAD penalties
- 1% redemption fee cap
- 3-day redemption window
- Fall 2027 implementation target