Canada Proposes Stablecoin Rules: 1:1 Backing, 3-Day Redemptions, No Yields

Canada is moving to regulate stablecoins with new draft rules that require non-bank issuers to back their tokens 1:1 with reserves held at qualified Canadian institutions. The rules also mandate that redemptions be settled within three business days, aiming to enhance consumer protection and financial stability in the digital asset space. The consultation, opened by Canadian authorities, invites feedback from industry stakeholders before final regulations are enacted. Notably, the draft maintains a ban on paying interest or yield to stablecoin holders, a measure intended to prevent these assets from functioning like securities or deposit products. This regulatory push reflects Canada's broader effort to integrate crypto assets into the traditional financial system under clear oversight, balancing innovation with risk mitigation. The outcome could set a precedent for other jurisdictions grappling with stablecoin oversight.