Canada has proposed stablecoin rules that would stop non-bank issuers from paying yield on held balances. The draft regulations draw on the US GENIUS Act and other international frameworks, a
Canada has proposed stablecoin rules that would stop non-bank issuers from paying yield on held balances. The draft regulations draw on the US GENIUS Act and other international frameworks, and are now open for public comment.
The government of Canada gave notice that it would accept public comment on the stablecoin regulations until Dec. 23.The Department of Finance published the proposed regulations in the Canada Gazette on October 24, 2026.
The central measure is the yield ban. Non-financial institution stablecoin issuers would be restricted from offering interest or yield to discourage holding the tokens.The ban would extend to third-party arrangements, though rewards tied to using tokens in transactions could still be allowed.
On redemption, issuers would have to redeem stablecoins within three business days of a tokenholder's request and could not charge a fee greater than 1% of the coins' total value. Reserves are also covered: non-bank issuers would need to hold reserves equal to their circulating tokens at qualified Canadian financial institutions.These include banks, credit unions and trust companies.
The government says the aim is to support safety for holders and reliable digital payments.
The proposed framework cites efforts to be consistent with stablecoin rules in the United States and other jurisdictions, to reduce the regulatory burden on multi-jurisdictional issuers. Ledger Insights notes, however, that Canada's yield ban goes beyond the issuer-level prohibition in the US GENIUS Act by targeting income-sharing arrangements between issuers and third parties.
The rules sit under Canada's Stablecoin Act. That law took effect on March 26, 2026, and the proposed regulations would supply the requirements needed to implement it.The Bank of Canada would register and supervise issuers.Issuers would also have to maintain fully backed reserves and submit monthly accountant-verified reports.
The banking sector has backed the restrictions. A Canadian Bankers Association spokesperson told The Logic in June that the association firmly supported the Stablecoin Act's prohibition on direct and indirect yield.Some exchanges, such as Coinbase Canada, already offer yields with risk disclosures.
On timing, the government said it intends for the regulations to come into force in fall 2027.The final requirements could change after public comments.
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