Canada publishes draft stablecoin rules: yield ban, 1% redemption fee cap
The draft Stablecoin Regulations, published in the Canada Gazette on Oct. 24, 2026, are open for comment until Dec. 23, 2026. They ban interest on held balances but allow transaction-based rewards.
TL;DR
- Canada's Department of Finance published draft Stablecoin Regulations in the Canada Gazette, Part I, on Oct. 24, 2026; comments are open until Dec. 23, 2026.
- The draft bans issuers from paying interest or yield tied to holding a stablecoin, including through third-party income-sharing, but allows transaction-based rewards.
- Issuers would have to redeem within three business days, with redemption fees capped at 1% of the redeemed amount.
- The intention is for the rules to come into force in fall 2027, alongside the Stablecoin Act, according to the Gazette notice.
Canada has put its stablecoin rulebook on the table. The Department of Finance published draft Stablecoin Regulations in the Canada Gazette, Part I, on Oct. 24, 2026. The comment period runs until Dec. 23, 2026, according to the Gazette's open consultations list. CoinDesk reported the 60-day consultation on Oct. 26, 2026.
The draft rules are "required to bring the SCA into force and would prescribe the elements needed for issuers to register with the Bank of Canada," the government said, as quoted by CoinDesk. The Bank of Canada would supervise non-bank issuers.
No yield, but rewards are allowed
The draft clarifies a ban on paying interest or yield tied to the holding of a stablecoin. Issuers also could not enter arrangements with other parties, such as income-sharing deals, that pay yield to make holders keep more tokens or hold them longer. The Department's policy is "to allow for the provision of transaction-based rewards," the Gazette notice says.
The fight over yield mirrors the U.S. debate. The Canadian Bankers Association "firmly supports the Stablecoin Act's explicit prohibition on yield, both direct and indirect," a spokesperson told The Logic in June, CoinDesk reported.
Reserves, redemption and fees
- Reserves must back tokens on at least a one-to-one basis; the draft sets no composition limits on permitted reserve assets.
- Non-bank issuers would hold reserves at qualified Canadian financial institutions, including banks, credit unions and trust companies, per CoinDesk.
- Redemption within three business days of a request, with no minimum amount.
- Redemption fees capped at 1%. The notice says current redemption fees are around 0.1%.
Supervision would be paid for by issuers. The draft sets three fee tiers based on outstanding stablecoin value (amounts in Canadian dollars):
Penalties could reach $1,000,000 for a serious violation and $10,000,000 for a very serious one. The intention is for the rules to come into force in fall 2027.
What it means for Web3 teams – Analysis
Canada now joins the U.S. in drawing a hard line between stablecoins and savings products. Projects that market stablecoin integrations should avoid any wording that suggests "interest" on held balances; under the draft, even logos or terms implying yield count as prohibited representations. Transaction-based rewards remain a usable lever. This is not legal or investment advice.
FAQ
When can I comment on Canada's draft stablecoin rules?
The draft Stablecoin Regulations were published on Oct. 24, 2026; the comment deadline is Dec. 23, 2026, 11:59 p.m. EST, according to the Canada Gazette.
Can Canadian stablecoin issuers pay yield?
No. The draft prohibits interest or yield tied to holding a stablecoin, including via third-party income-sharing, but allows transaction-based rewards.
How fast must issuers redeem?
Within three business days after a request, with redemption fees capped at 1% of the redeemed amount.
When do the rules take effect?
The Gazette notice says the intention is for them to come into force in fall 2027, alongside the Stablecoin Act.
Sources
News summary based on the sources above. Not investment, legal or tax advice. Editorial policy & corrections · Report an error
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