regulation
Canada opens 60-day consultation on draft stablecoin rules, keeps yield ban
Finance Canada published draft stablecoin rules in the Canada Gazette on Oct 24, with comments closing Dec 23. Yield banned, redemption capped at 1% within three business days.
Canada's Department of Finance published draft regulations under the Stablecoin Act in the Canada Gazette on October 24, 2026, opening a 60-day consultation that closes December 23. The draft, flagged by CoinDesk on Monday, sets reserve, redemption and registration requirements for payment stablecoin issuers and keeps the prohibition on paying yield that was already in the parent statute. The regime is expected to take effect toward the end of 2027. The underlying framework is laid out on the government's Canada's Stablecoin Framework page.
What the draft rules say
- Yield ban. Issuers may not pay interest on stablecoins, directly or through third parties. Transaction-tied rewards remain allowed.
- Reserves. Non-bank issuers must hold reserves equal to the circulating supply, deposited at qualified Canadian institutions — banks, credit unions and trust companies.
- Redemption window. Holders must be able to convert tokens back to fiat within three business days.
- Redemption fee cap. Fees are capped at 1% of the redemption value.
- Registration. Non-financial-institution issuers must register with the Bank of Canada; the draft rules spell out what the Bank will need from applicants to bring the Stablecoin Act into force.
The draft does not specify a minimum capital requirement separate from the reserve rule, and does not single out algorithmic designs — the whole regime assumes 1:1-reserved payment stablecoins.
Who is covered
The Stablecoin Act and the draft regulations target payment stablecoins issued either domestically or by foreign entities offering tokens into Canada. Bank issuers would continue to be regulated primarily through existing prudential frameworks. Securities-regulatory oversight of stablecoins through the Canadian Securities Administrators staff notice remains layered on top; the draft rules do not displace it.
The Canadian Bankers Association came out in support of the yield ban in June, calling it an "explicit prohibition on yield, both direct and indirect" that applies through structured products as well.
Timeline
| Date | Event |
|---|---|
| 2025-11-18 | Draft Stablecoin Act tabled in Bill C-15 (Budget 2025 Implementation Act) |
| 2026-10-24 | Draft regulations published in the Canada Gazette, Part I |
| 2026-12-23 | 60-day comment period closes |
| end of 2027 | Expected in-force date |
What to watch
- The CSA's response: will Canadian securities regulators adjust their staff notice on fiat-backed stablecoins once the federal framework comes online.
- Positions from large Canadian banks on issuing their own stablecoins under the dual bank/non-bank regime.
- Whether Circle, Paxos or Tether file foreign-issuer registrations by end-2027.
- Comments from the Office of the Superintendent of Financial Institutions (OSFI) on the capital treatment of stablecoin reserves held at banks.
Context
Canada's draft tracks a familiar perimeter — reserved assets, redemption guarantees, no yield — that already runs through the US GENIUS Act (effective January 18, 2027) and the EU's MiCA stablecoin rules. The 1% redemption-fee cap and three-business-day settlement window are tighter than MiCA's "without undue delay" formulation but looser than the operational redemption SLAs that USDC and USDP have been running in practice.