Canada proposes draft stablecoin rules with yield ban and fee caps

The Canadian government has opened a 60-day public consultation on proposed stablecoin regulations, as reported by Decrypt, CryptoSlate, and NewsCord. The draft rules were published in the official government newspaper, the Canada Gazette. According to Decrypt, the draft requires issuers to maintain one-to-one reserves and fulfill rapid redemption requests, while retaining a prohibition on paying yield or interest to token holders. [1][2][5]

Under the proposal, issuers must give retail holders direct cash-out options without imposing a minimum redemption amount, CryptoSlate reported. Normal redemptions must be fulfilled within three business days, and issuer redemption fees are capped at one per cent. CryptoSlate noted that reserve market illiquidity could still constrain daily redemptions. [1][2][6][7]

Cryptocurrency is a digital asset class that relies on distributed ledger technology to execute transactions securely [9]. Stablecoins are designed to maintain a stable value, typically pegged to the U.S. dollar, by backing tokens with underlying reserve assets [1]. [1][9]

The framework also addresses yield structures and rewards. Unchainedcrypto reported that the draft regulations prohibit issuers from distributing yield through third parties, though the rules allow certain usage-based rewards. The public consultation period gives industry stakeholders 60 days to submit feedback on the proposed regulatory framework. [1][5][8]