Canada Launches Public Consultation on New Stablecoin Rules

The Canadian government has opened a 60-day public consultation period regarding stablecoin regulation. The process concludes on December 23 and aims to define registration requirements for issuers with the Bank of Canada.

Guidelines state that non-bank issuers must hold reserves equal to the value of tokens in circulation. These assets must be deposited in qualified Canadian financial institutions such as banks and credit unions.

The text maintains the prohibition on yield payments to users including direct or indirect gains. This measure seeks to prevent the migration of traditional bank deposits into digital assets which is a recurring concern for the local banking sector.

Issuers must ensure that customers can convert their stablecoins into fiat currency within three business days. Redemption fees for these operations will be capped at 1% of the total value.

The regulatory framework is expected to take effect by the end of 2027. The government states that these rules are necessary to operationalize the Stablecoin Act previously passed in the country.