Canada is moving faster on stablecoin regulation after releasing rules that would allow non-banks to issue the tokens. Unlike proposals in South Korea, the Canadian government did not include any requirement for bank ownership stakes. Market participants are increasingly calling for Korea to introduce legislation as soon as possible, built around effective supervision and user protection.
Canada's Department of Finance released a draft set of rules governing non-bank stablecoin issuers on the 24th and opened a 60-day consultation period, according to foreign media reports on the 27th. The move follows the enactment of a stablecoin law in March and aims to establish detailed operating standards ahead of implementation in the fall of 2027.
In Canada, provincial securities regulators currently oversee the market by regulating cryptocurrency trading platforms, permitting trading only in stablecoins that meet certain standards. Once the stablecoin law takes effect, it will comprehensively govern the issuance itself of stablecoins used across provincial borders or internationally. The Bank of Canada will supervise issuers.
The new rules apply to domestic and foreign issuers that are not prudentially regulated financial institutions. Without any requirement that a bank hold a minimum ownership stake, non-banks will be able to issue stablecoins once they meet requirements such as reserve assets and register with the Bank of Canada.
Instead, issuers must submit detailed information on their governance structures. Under Article 8 of the draft, issuers must report anyone who directly or indirectly holds 10% or more of the voting rights for electing directors, along with beneficial owners. Even those who fall outside that threshold must be disclosed separately if they control the issuer, along with details such as their share of voting rights.
Issuers must maintain reserve assets worth at least the value of stablecoins in circulation and provide redemption at a one-to-one ratio in the reference fiat currency. Both domestic and foreign issuers must keep reserve assets segregated at a qualified custodian established in Canada.
As in the United States, issuers are barred from paying interest or yield on stablecoin holdings. Indirect payments through third parties are also restricted, though rewards tied solely to actual transactions, rather than to holdings, are permitted. The aim is to limit competition with bank deposits while promoting the use of stablecoins as a payment instrument.
While Canada has gone as far as setting detailed rules for non-bank issuance, critics say the question of whether banks must take ownership stakes continues to hold up Korea's own framework. "The discussion needs to move beyond who holds the equity to how issuers will be supervised and how users will be protected," a cryptocurrency industry official said.