Canada drafts stablecoin rules: no yield and redemption within 3 days

What happened. Canada passed its Stablecoin Act in March 2026. To bring it into force it needs detailed regulations. On 24 October the draft was published in the official Canada Gazette, opening a 60-day public consultation.

Who it covers. Only issuers that are not banks, insurers, trust or loan companies or credit unions. Banks follow their own rules. The government expects about five issuers to be covered. It names current players QCAD from Stablecorp, CADC from Loon Technology and USDC from Circle.

The main rules. An issuer registers with the Bank of Canada before issuing coins. At the end of each day its reserve, in the same currency as the coin, must be worth at least all coins in circulation. The reserve may only sit in safe, easy-to-sell assets: cash and demand deposits, government bills maturing within three months, one-day repo deals and money market funds made of those assets. It must be held by a Canadian custodian so other creditors cannot take it in a bankruptcy.

Redemption and yield. Holders can cash out within three business days, with no minimum amount. The redemption fee is capped at 1%. Issuers may not pay interest for holding the coin, including through partners. The government's logic: a stablecoin is a way to pay, not a deposit or an investment.

What comes next. Comments close on 23 December 2026. The rules are meant to start in fall 2027. Issuers already active can keep going if they apply for registration within 30 days of the start date. The finance minister can block a registration on national security grounds.

Confirmed facts

• Draft regulations under the Stablecoin Act were published in the Canada Gazette on 24 October 2026, with comments open until 23 December 2026.^[1][2]
• The Stablecoin Act received royal assent in March 2026.^[1]
• Issuers that are not financial institutions would have to register with the Bank of Canada before issuing a stablecoin.^[1][2]
• Issuers must redeem stablecoins within three business days with no minimum amount, and redemption fees are capped at 1%.^[1][2]
• Paying interest or yield for holding a stablecoin is banned, including through arrangements with other parties.^[1]
• Reserves may only be held in cash and demand deposits, government debt maturing within three months, one-day repos and money market funds of such assets, at a Canadian custodian.^[1]
• The government expects the act to cover about five issuers and names QCAD, CADC and USDC.^[1]
• The rules are intended to come into force in fall 2027.^[1][2]

Implications

• ConfirmedStablecoins in Canada will not be able to pay holders interest from the issuer.
• ConfirmedThe rules are designed to match US, UK and EU rules, and Canada hopes for mutual recognition.
• Our readingBig issuers like Circle may find it easier to work across countries if the rules are recognised as equivalent.

Still unknown

• Whether the text will change after the consultation.
• Whether the US or the EU will recognise Canada's rules as equivalent.
• Whether Tether will register USDT.

Who it affects

Canada, United States, Global. Stablecoin holders and crypto companies that work with Canada

Sources

1. Government of Canada (Canada Gazette, Part I): Stablecoin Regulations, Canada Gazette Part I, Vol. 160, No. 43 October 24, 2026 · official
2. Cointelegraph: Canada opens consultation on stablecoins, citing US GENIUS Act October 26, 2026 · media