Canada opens consultation on stablecoins, citing US GENIUS Act

As part of the potential implementation of its Stablecoin Act, the Canadian government will hear from the public on a proposed framework for tokens from non-financial institutions. Lawmakers in the Canadian government opened a 60-day public consultation on regulations proposed to address non-financial institution stablecoin issuers, including a potential prohibition on yield payments. On Saturday, the government of Canada >gave notice that it would be open to public comment on the stablecoin regulations until Dec. 23. The proposed framework cited efforts to be consistent with stablecoin regulations in the United States and other jurisdictions, to “reduce the overall regulatory burden on multi-jurisdictional issuers.” Notably, the proposed regulations said that non-financial institution stablecoin issuers would be restricted from offering interest or yield to discourage HODLing the tokens. They would also be required to redeem stablecoins within three business days of requests from tokenholders, and not charge a fee greater than 1% of the coins’ total value. The regulations fell under Canada’s Stablecoin Act, which was passed in March and intended to address non-financial institution issuers. According to the government, the proposed rules were required to enact the policy and include provisions for issuers to register with Canada’s central bank. “The intention is for the proposed Regulations to come into force in fall 2027,” said the government. “Once the proposed Regulations are in effect, issuers of stablecoins in Canada who are not financial institutions would be required to apply for registration with the Bank of Canada prior to issuing a stablecoin.” The GENIUS Act, which establishes a regulatory framework for stablecoins in the US, is scheduled to take effect in January 2027. Meanwhile, the European Union’s regulations, Markets in Crypto Assets (MiCA), could give exchanges until January to halt services for stablecoins not in compliance with the framework, likely including Tether’s USDt (USDT), the largest stablecoin by market capitalization. Related: Bank of Canada lays out criteria for ‘good money’ stablecoins