Canada Opens Stablecoin Consultation, Citing US GENIUS Act

The Government of Canada has opened a 60-day public consultation on regulations for stablecoin issuers that are not financial institutions, with comments accepted through Dec. 23. The proposed framework is intended to align Canada with the US GENIUS Act and other international standards while reducing compliance burdens for stablecoin issuers operating across multiple jurisdictions.

The draft rules would prohibit non-financial institution issuers from paying interest or yield to token holders. Issuers would also be required to redeem stablecoins within three business days of a holder’s request and could not charge a redemption fee exceeding 1% of the tokens’ total value. The government said the yield restriction is designed to discourage holding stablecoins as an investment rather than using them for payments.

Canada’s Stablecoin Act, passed in March, establishes the legal basis for regulating non-financial stablecoin issuers. The government intends for the proposed regulations to enter into force in fall 2027. Once implemented, companies issuing stablecoins in Canada would need to register with the Bank of Canada before offering their tokens.

The consultation also comes as the US prepares to implement the GENIUS Act in January 2027. In Europe, exchanges are expected to phase out support for stablecoins that do not comply with the Markets in Crypto-Assets framework, potentially affecting Tether’s USDT. Canada’s proposal reflects a broader global push to impose registration, reserve, redemption and disclosure standards on stablecoin markets.