Canada has opened a public consultation on a draft regulatory framework for stablecoins, aiming to establish clear rules for the sector while maintaining its ban on interest and yield payments to holders.
Under the proposed framework, stablecoin issuers would be required to:
· Hold 1:1 reserves at qualified Canadian financial institutions.
· Allow users to exchange stablecoins for cash within three business days.
· Cap fees for converting stablecoins back into cash at 1%.
The 60-day consultation ends on December 23, with the rules expected to take effect in late 2027.
Analysts view the framework as a cautious, balanced approach that seeks to enhance consumer protection and financial stability, while keeping strict limits that prevent stablecoins from being used as yield-bearing investment products—unlike some other jurisdictions.