Canada Opens Consultation on Stablecoins, Aiming for Implementation in 2027
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Written by: Turner Wright, staff writer Edited by: Robert Lakin, staff editor
Canada is taking a significant step towards regulating stablecoins with the opening of a 60-day public consultation on proposed regulations for non-financial institution stablecoin issuers. This consultation is part of the country's efforts to implement the Stablecoin Act, which aims to create a consistent framework with similar regulations in the US and other jurisdictions.
The Canadian government's notice, issued on Saturday, invites public comment on the proposed framework until December 23, 2026. Key points include:
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Potential Prohibition on Yield Payments: The regulations propose restricting non-financial institutions from offering interest or yield on stablecoins to discourage long-term holding.
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Redemption Requirements: Stablecoins would need to be redeemed within three business days of requests from token holders.
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Fee Limits: Issuers would be limited to charging a fee of no more than 1% of the coins’ total value.
The Stablecoin Act was passed in March and calls for registration of stablecoin issuers with the Bank of Canada. The government states that the proposed regulations are necessary to implement this policy, aligning with the US Genius Act, scheduled to take effect in January 2027.
Meanwhile, the European Union’s MiCA regulations could give exchanges until January to halt services for non-compliant stablecoins, potentially affecting Tether’s USDt (USDT), the largest stablecoin by market capitalization.