Canada initiates consultations on stablecoins, stating it will refer to the US GENIUS Act

As part of the potential implementation of its Stablecoin Act, the Canadian government will seek public feedback on the proposed framework for non-financial institutions to issue tokens.

Canadian government legislators have launched a 60-day public consultation regarding proposed regulatory rules aimed at regulating non-financial institution stablecoin issuers, which may include a ban on paying yields.

The Canadian government announced on Saturday that it would seek public feedback on regulations for stablecoins, with a deadline of December 23. The proposed framework states that the aim is to align these regulations with those of the United States and other jurisdictions in order to “reduce the overall regulatory burden on issuers across multiple jurisdictions.”

It is worth noting that the proposed rules state that non-financial institution stablecoin issuers will be restricted from offering interest or returns in order to prevent users from obtaining benefits by holding these tokens. The rules also require that issuers must redeem the stablecoins within three working days after a token holder makes a request, and the fees charged shall not exceed 1% of the total value of the relevant tokens.

These regulations fall under the framework of Canada's "Stablecoin Act." The act was passed in March of this year and aims to regulate non-financial institution issuers. The Canadian government has stated that the proposed regulations are necessary to implement this policy, which also include provisions requiring issuers to register with the Bank of Canada.

The Canadian government stated: "The proposed regulations are scheduled to come into effect in the fall of 2027. Once the proposed regulations are in place, stablecoin issuers in Canada that are not financial institutions will be required to apply for registration with the Bank of Canada before issuing stablecoins."

In the United States, the GENIUS Act, which establishes a regulatory framework for stablecoins, is set to take effect in January 2027. Meanwhile, the European Union's Crypto Assets Market Regulation Act ( MiCA ) may require exchanges to stop providing services for stablecoins that do not comply with this framework by January next year, which is likely to include the largest stablecoin by market capitalization, Tether USDt ( USDT ).

Relevant report: Canadian Bank outlines standards for “high-quality currency” stablecoins