Canada opens consultation on draft stablecoin rules, maintains ban on yields Under the draft rules, non-bank stablecoin issuers must back tokens 1:1 with reserves held at qualified Canadian institutions and settle redemptions within three business days. – Canada opened a 60-day…
nsultation, ending Dec. 23, on stablecoin rules that would prohibit issuers from paying interest while allowing transaction-based rewards. – The proposed framework would require nonbank issuers to maintain reserves equal to their circulating tokens at qualified Canadian financial institutions and redeem stablecoins within three business days, with fees capped at 1%. – The rules are expected to take effect in late 2027 as Canadian banks and regulated firms develop tokenized deposits and Canadian-dollar stablecoins. The Canadian government started a 60-day public consultation on draft stablecoin regulations, which maintain a ban on yield payments and require non-bank issuers to deposit their reserves with Canadian financial institutions
The consultation, which ends Dec. 23, comes as the country’s banking industry presses for a ban on yield payouts, echoing concerns voiced in the U.S. that customers could move their money out of bank accounts, leaving traditional financial institutions with less to lend. Natalle Begeron, a spokesperson for the Canadian Bankers Association, told The Logic in June that the group “firmly supports the Stablecoin Act’s explicit prohibition on yield, both direct and indirect.” The government passed the Stablecoin Act earlier this year. The draft regulations are “required to bring the SCA into force and would prescribe the elements needed for issuers to register with the Bank of Canada,” the government said.
Some crypto exchanges in Canada, however, are already paying rewards to stablecoin holders. Coinbase Canada received permission from the Ontario Securities Commission (OSC) this year to offer yields on eligible tokens, provided it warned customers about the…