Canada opens consultation on stablecoin rules, keeps the yield ban in place
Draft regulations under the Stablecoin Act would require Bank of Canada registration, Canadian-held reserves and at-par redemption, but no interest for holders
Canada has put its stablecoin rulebook on the table for public comment. The country is not budging on one point: holders still can’t earn yield just for sitting on the tokens.
The Department of Finance published proposed regulations in the Canada Gazette on October 24, 2026. That started a 60-day public consultation that closes on December 23, 2026, at 11:59 p.m. EST. Ottawa wants feedback, but it has already decided that a stablecoin is a payments tool and not a savings account.
What the draft rules actually require
The proposed regulations sit under the Stablecoin Act, which received Royal Assent on March 26, 2026, through Bill C-15. The law passed months ago. These draft regulations add the operating detail.
The framework would bring federal oversight to non-financial institutions that issue fiat-backed stablecoins with interprovincial or international reach. A token used only within one province would stay outside it. Anything that crosses provincial lines or borders, which covers most useful stablecoins, would fall inside.
The core obligations break down like this:
Registration. Non-bank issuers would need to register with the Bank of Canada. The central bank would take on a gatekeeping role for private digital dollars.
Reserves. Issuers would have to hold reserves equal to their outstanding stablecoins on a daily basis. Those reserves must sit in high-quality liquid assets held by Canadian custodians. Every token in circulation needs a matching asset parked in Canada, and the books get checked every day, not every quarter.
The news moving money, markets, and the world—before your day starts.
Daily. Free. Join 34,000+ readers across crypto, finance, and policy.
Redemption. Stablecoins would have to be redeemable at par. The draft proposes a three-business-day processing window and a 1% fee cap for small holders. If you hand back one Canadian-dollar token, you are owed one Canadian dollar, minus a modest and capped fee in some cases.
No passive yield. Issuers could not pay interest or yield to users simply for holding stablecoins. Transaction-based rewards would be allowed, so issuers can still reward people for spending.
Background: from law to rulebook
Canada’s process has followed a familiar order. Lawmakers passed the Stablecoin Act through Bill C-15 in March 2026. Finance officials then took about seven months to turn it into draft regulations. Now industry and the public get two months to respond before the final version is set.
Banks and prudentially regulated financial institutions are excluded from these particular rules. They remain free to work on tokenized deposits or Canadian-dollar stablecoins under their existing supervisory frameworks. The regulations are expected to take effect in fall 2027.
Around 30 crypto firms are expected to register as payment service providers once the regime is live.
What this means for issuers, exchanges and banks
For crypto firms, the biggest gain is clarity. A defined registration path with the Bank of Canada, fixed reserve standards and clear redemption terms replace a lot of guesswork. Firms that wanted to issue or distribute Canadian-dollar stablecoins now know the requirements.
Daily reserve matching, Canadian custody and capped redemption fees all add operating overhead. Firms whose model relies on earning a spread on reserves and sharing it with users lose that lever.
A possible friction point is overlap with existing securities regulation. A federal payments framework run through the Bank of Canada could collide with how provincial securities regulators already treat some crypto products.
The items to watch between now and December 23 are the redemption window, the fee cap and the definition of transaction-based rewards. Those details are still proposals.