Canada’s Department of Finance has opened a 60-day consultation on draft regulations under the Stablecoin Act, CoinDesk reports, with comments closing on 23 December and the framework expected to take effect towards the end of 2027.
The draft was published in the Canada Gazette. It is aimed at non-bank issuers, who would have to hold reserves equal to the value of tokens in circulation at qualified Canadian institutions, including banks, credit unions and trust companies.
Holders would have to be able to convert tokens into ordinary currency within three business days. Redemption fees would be capped at 1 percent. The draft also sets out what issuers must file to register with the Bank of Canada, which the government says is needed before the Act can come into force.
Interest is banned, including when paid through third parties. Rewards tied to transactions are still allowed. Parliament passed the Act earlier this year, so the consultation is about detail, not principle. The Canadian Bankers Association says it firmly supports the ban, and banks argue yield could pull deposits out of accounts and shrink lending, the same argument made in the United States.
There is a wrinkle. Coinbase Canada received permission from the Ontario Securities Commission this year to offer yield on eligible tokens, on conditions that include risk warnings and a statement that the funds carry no deposit insurance.
Whether that permission survives a federal ban on issuer-paid yield is the question the consultation does not answer. The text of the draft will decide how much room is left between a prohibited yield and a permitted reward.
