Canada Seeks Input on Stablecoin Rules, Proposes Interest Ban for Non-Financial Issuers
Summary
- Canada has released a proposal centered on non-financial stablecoin issuers and an interest payment ban, and will accept comments through Dec. 23.
- The proposal specifies a ban on interest and yield payments to stablecoin holders, a three-day redemption requirement, and a 1% cap on redemption fees.
- Canada is targeting implementation in the fall of 2027 and plans to align its framework with the US GENIUS Act and the EU’s MiCA regime.
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Canada has proposed rules that would bar non-financial stablecoin issuers from paying interest and has opened the framework for public comment.
Cointelegraph reported on October 26 that the Canadian government released the proposed stablecoin rules on October 24 and will accept feedback for 60 days through December 23. The proposal applies to stablecoin issuers other than banks and other financial institutions.
The draft includes a provision banning issuers from paying interest or other returns to stablecoin holders. The measure is intended to discourage users from holding stablecoins for extended periods to earn yield.
The proposal also sets out issuers’ redemption obligations. If a user requests redemption, the issuer must process it within three business days. Redemption fees would be capped at 1% of the asset’s value.
The rules are a follow-up measure to implement Canada’s Stablecoin Act, which passed in March. Once the regulations take effect, non-financial issuers would have to apply to register with the Bank of Canada before issuing stablecoins.
Canada is targeting implementation in the fall of 2027. The government plans to align the framework with rules in major jurisdictions, including the US, to reduce the compliance burden for stablecoin issuers operating across multiple countries.
The US, meanwhile, plans to implement the GENIUS Act, which establishes a stablecoin regulatory framework, in January 2027. The European Union is also moving to restrict exchange services for stablecoins that fail to meet regulatory requirements under its Markets in Crypto-Assets, or MiCA, regime.
