Canada publishes draft stablecoin rules: no yield for holders, redemption within three business days

Canada’s Department of Finance has published draft regulations to bring the country’s Stablecoin Act into force, opening a 60-day public consultation that ends on 23 December, according to the Canada Gazette notice dated 24 October.

The Stablecoin Act received royal assent in March 2026. Under the draft rules, stablecoin issuers that are not banks or other prudentially regulated financial institutions would have to register with the Bank of Canada, which would supervise them.

Issuers would have to hold reserves at least equal to the value of their outstanding stablecoins at the end of each day, in cash deposits, short-term government debt, overnight reverse repurchase agreements or qualifying money market funds, held with custodians incorporated in Canada. Holders would have to be able to redeem their stablecoins one-for-one within three business days, with redemption fees capped at 1%.

The draft keeps the Act’s ban on issuers paying interest or yield for holding a stablecoin, including through arrangements with third parties, but allows rewards tied only to using a stablecoin. The government said it chose this position after several rounds of consultation with industry.

Penalties for violations would reach up to C$1 million for a serious violation and C$10 million for a very serious one. The government said it intends the rules to take effect in autumn 2027.

CoinDesk reported that the Canadian Bankers Association had backed a ban on yield, while Coinbase Canada received permission from the Ontario Securities Commission this year to offer rewards on eligible tokens.