Canada Publishes Draft Stablecoin Rules With Broad Yield Ban and 2027 Implementation Target
Canada Publishes Draft Stablecoin Rules With Broad Yield Ban and 2027 Implementation Target #
Canada’s Department of Finance has launched a 60-day public consultation on proposed regulations that would bring the country’s Stablecoin Act into force. The draft sets out requirements for non-bank issuers and preserves a strict prohibition on paying interest or yield to token holders.
The draft Stablecoin Regulations were published in the Canada Gazette on October 24, 2026, with a comment deadline of December 23. The regime is expected to take effect in fall 2027, according to CoinDesk, giving issuers and exchanges roughly a year to prepare once the rules are finalised.
Under the proposed framework, non-bank stablecoin issuers offering tokens to Canadians, regardless of where the issuer is based, would be required to register with the Bank of Canada. The Bank of Canada would be the licensing authority and primary supervisor. Registered issuers would need to maintain daily reserves equal to their outstanding stablecoins, held at qualified Canadian financial institutions, and must honour redemption requests within three business days. Redemption fees would be capped at one percent of the amount redeemed. Issuers would also be required to submit monthly reports verified by an independent accountant.
The yield ban was written into the Stablecoin Act enacted under Bill C-15 earlier in 2026 and carries through into the draft regulations. It is broader than the approach taken in the United States’ GENIUS Act. American rules bar issuers from paying interest directly but leave exchanges free to share yield, a gap that has allowed platforms such as Coinbase to offer returns to USDC holders. Canada’s draft closes that route by prohibiting issuers from entering any income-sharing arrangement with intermediaries that results in holding-based rewards. Transaction rewards tied to spending rather than holding remain permitted under both regimes.
Ledger Insights noted that the Bank of Canada’s role as sole registrar and supervisor is unusual among central banks globally, and that the draft also draws software wallets into the payments regulatory perimeter. The Canadian Bankers Association has publicly backed the yield prohibition, arguing that allowing stablecoins to function as deposit substitutes could divert funding away from traditional lenders, an argument it also made during the US debate.
Several major Canadian financial institutions are already developing tokenised deposits and Canadian-dollar stablecoins ahead of the 2027 deadline. Stakeholders have until December 23 to submit comments to the Department of Finance.
Copy link