Canada’s Draft Stablecoin Rules Cap Redemption Fees at 1% and Ban Yield

The Canadian government has launched a 60-day public consultation on draft stablecoin regulations, a process scheduled to conclude on December 23. According to CoinDesk, these draft rules are intended to bring the Stablecoin Act into force by prescribing the necessary elements for issuers to register with the Bank of Canada. The proposed regulations include requirements for one-to-one reserves and fast redemption, with PYMNTS reporting that non-bank issuers must hold their reserves with Canadian financial institutions.

The draft rules maintain a ban on paying interest or yield to stablecoin holders, including through third parties. CoinDesk reports that this comes as the Canadian banking industry has been pressing for a prohibition on yield payouts. While the regulations aim to uphold this ban, CoinDesk notes that some crypto exchanges in Canada are already paying rewards to holders, such as Coinbase Canada, which received permission from the Ontario Securities Commission to offer yields on certain tokens under specific risk-warning conditions.

Brief written by urgent.news from Decrypt, PYMNTS, CoinDesk — 3 reports on this story. Machine-written — may contain errors; check the original before relying on it.