The Canadian government has kicked off a 60-day public consultation on draft stablecoin regulations that would maintain a ban on yield payments.
In Canada, stablecoins are currently overseen by provincial and territorial securities regulators. However, the government recently introduced the Stablecoin Act, targeting private-sector issuers operating across jurisdictions. The draft rules maintain a ban on yield payments, something which the country’s banking industry has pushed for over concerns that they could lead to customers moving their money out of bank accounts.
In addition, non-bank stablecoin issuers will be required to back tokens 1:1 with reserves held at qualified Canadian institutions, settle redemptions within three business days, with fees capped at one per cent.
In September, the country’s biggest banks teamed up to explore a Canadian-dollar tokenised deposit system that could serve as an alternative to stablecoins and help them see off upstart rivals.