Canada Opens Consultation on Non-Bank Stablecoin Rules

The Canadian government opened a 60-day public consultation on regulations proposed to address non-financial institution stablecoin issuers. The consultation period ends on December 23. The proposed framework cites efforts to be consistent with stablecoin regulations in the United States and other jurisdictions. The government cited the US GENIUS Act as a reason for opening the consultation. The US GENIUS Act is scheduled to take effect in January 2027. European Union regulations could give exchanges until January to halt services for non-compliant stablecoins.

Under the draft rules, non-bank stablecoin issuers must back tokens 1:1 with reserves held at qualified Canadian institutions. Issuers are restricted from offering interest or yield to discourage holding the tokens. They must redeem stablecoins within three business days of requests from tokenholders. Issuers are prohibited from charging a redemption fee greater than 1% of the coins' total value. Non-financial institution stablecoin issuers would be required to apply for registration with the Bank of Canada prior to issuing a stablecoin once the regulations come into force.

The proposed regulations fall under Canada's Stablecoin Act, which was passed in March. The government intends for the proposed Regulations to come into force in fall 2027.