Members of the Canadian parliament have initiated a 60-day period of public consultations for the regulation of non-bank stablecoin issuers, which could include a ban on yield payments. The Canadian government announced that it would accept comments from the public on the proposed stablecoin regulation until December 23. The proposal framework stated that its core intention was to be in harmony with other stablecoin regulations in the US and elsewhere, in order to “reduce the overall regulatory burden on multi-jurisdictional issuers.”
Proposed Framework Would Require Non-Bank Issuers to Register
It is noted that the recommended regulations indicated that stablecoin issuers who were not financial institutions could not give any kind of yield because of the tendency towards HODLing. Furthermore, the stablecoin issuers were mandated to have a redemption period of only three business days and could only charge a 1 percent fee on the coins’ total value.
These rules were part of Canada’s Stablecoin Act, which was enacted in March and aimed at dealing with non-financial institution issuers. The government says that the introduction of such rules was necessary to implement the policy, including requirements 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 before issuing a stablecoin.”
The GENIUS Act, which sets out rules for stablecoins in the US, will come into effect in January 2027. On the other hand, the regulations set out in Markets in Crypto Assets (MiCA) in Europe could allow exchanges until January to suspend operations on stablecoins that fail to meet the new rules, which would most probably include Tether’s USDt (USDT), the largest stablecoin by market capitalisation.
Similar to Canada, the UK’s Financial Conduct Authority (FCA) has said it is consulting on guidance for the country’s future crypto rules. This proposed guidance supports the FCA’s goal for an open, sustainable, and competitive crypto market that is trustworthy for crypto users. FCA has also put out a full consultation text that is available on the FCA website.
