What happened
- Specific facts/numbers: The Department of Finance published draft regulations under the Stablecoin Act, launched a 60-day consultation running until December 23, and said the rules are expected to take effect in fall 2027; the draft would require non-bank issuers to register with the Bank of Canada, hold fully backed reserves, and file monthly accountant-verified reports.
- Institutions involved: Canada’s Department of Finance and the Bank of Canada are central to the regime, with the draft framework aimed at non-bank stablecoin issuers and also affecting intermediaries such as exchanges and software wallet providers.
- Regulatory/technical context: The draft goes beyond a simple issuer-level interest ban by prohibiting arrangements, including income-sharing with intermediaries, that result in holding-based rewards; it also brings software wallets into payments regulation and places the Bank of Canada in a registrar-and-supervisor role.
- What to watch next: Watch for submissions before the December 23 consultation deadline and for any revisions ahead of the expected fall 2027 implementation; no more specific next milestone was identified.
Why it matters
The proposal would materially constrain how stablecoin firms and exchanges can market yield to Canadian users while raising compliance obligations around reserves, reporting, and registration.
HKMA Relevance
Direct: Another central bank is taking a concrete supervisory and regulatory role in stablecoins and payments, an area within the HKMA’s own remit.