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.
Canada has launched a 60-day public consultation to gather input on proposed regulations for stablecoin issuers that are not financial institutions. The Canadian government aims to align its regulations with those in the United States and other jurisdictions to minimize the regulatory burden on multijurisdictional issuers. The government announced that these proposed regulations will come into force in fall 2027, following the implementation of the Canadian Stablecoin Act, which was passed in March.
The regulations would prohibit non-financial institution stablecoin issuers from offering interest or yield to discourage holding tokens. Additionally, they would be required to redeem stablecoins within three business days of requests, without imposing fees exceeding 1% of the total value of the coins. These rules are part of the process for non-financial institution issuers to register with Canada's central bank, the Bank of Canada.
The government stated that the objective is to encourage issuers to apply for registration with the Bank of Canada prior to issuing a stablecoin. The GENIUS Act, which established a regulatory framework for stablecoins in the US, is set to take effect in January 2027. In the European Union, the Markets in Crypto Assets (MiCA) regulations may require exchanges to halt services for stablecoins not compliant with the framework, potentially including Tether's USDt (USDT), the largest stablecoin by market capitalization.
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