The Department of Finance opened the consultation on Oct. 26, with submissions due by Dec. 23. The draft rules, needed to bring the recently passed Stablecoin Act into force, would require non-bank stablecoin issuers to maintain reserves equal to the value of their circulating fiat-pegged tokens at Canadian banks, credit unions or trust companies.
Customers would be able to redeem stablecoins for fiat currency within three business days, with redemption fees capped at 1%. The framework is expected to take effect toward the end of 2027.
The Canadian Bankers Association has voiced support for the yield ban. Spokesperson Natalle Begeron told The Logic in June that the group 'firmly supports the Stablecoin Act’s explicit prohibition on yield, both direct and indirect.' Banks have argued that allowing yields on stablecoins could draw deposits away from traditional institutions, reducing their ability to lend.
However, some crypto exchanges in Canada are already offering yields. Coinbase Canada received permission from the Ontario Securities Commission this year to pay rewards on eligible tokens, provided it warned customers about risks and made clear the funds are not covered by deposit insurance. The proposed rules would prohibit stablecoin issuers from paying interest, including through third parties, but would still allow rewards linked to transactions.
The consultation comes as Canada's six largest banks said late last month they were exploring a Canadian-dollar tokenized system to speed up payments among traditional institutions. In May, Tetra Trust Company, Canada's first regulated digital asset custodian, launched CADD, a Canadian-dollar stablecoin approved by Alberta Treasury Board and Finance.