Canada opens consultation on stablecoin rules, maintains ban on yield payouts
Canada has opened a 60-day consultation on draft stablecoin rules, required to implement its Stablecoin Act. The proposals ban issuers from paying interest or yield, including via third parties, but permit transaction-linked rewards. Non-bank issuers must back tokens fully with reserves held at qualified Canadian financial institutions and allow redemption for regular currency within three business days, with fees capped at 1%. The framework is expected to take effect toward the end of 2027. The proposals come amid banking-sector concerns that stablecoin yields could draw funds from banks. Coinbase Canada has separate provincial permission to offer certain token rewards under risk disclosures, while major banks are exploring a Canadian-dollar tokenized payment system.
