At a glance
- The government said the draft regulations are "required to bring the SCA into force" and would prescribe the elements issuers need to register with the Bank of Canada.
- For advisors who hold Canadian-dollar tokens in client cash, the draft sets three diligence terms: no interest, customer redemptions within three business days, and redemption fees capped at 1%.
- The yield prohibition would also cover interest paid through third parties, while transaction-based rewards would still be allowed.
Canada opened a 60-day consultation on draft stablecoin rules that would bar issuers from paying interest and require non-bank issuers to hold reserves with Canadian banks, credit unions or trust companies.
The government said the draft regulations are "required to bring the SCA into force" and would prescribe the elements issuers need to register with the Bank of Canada. CoinDesk Policy reported the opening on Oct. 26. The Stablecoin Act passed earlier this year, and the framework is expected to take effect toward the end of 2027.
For advisors who hold Canadian-dollar tokens in client cash, the draft sets three diligence terms: no interest, customer redemptions within three business days, and redemption fees capped at 1%. Against a deposit account, the trade is forgone yield for tokenized settlement.
The yield prohibition would also cover interest paid through third parties, while transaction-based rewards would still be allowed. Canadian Bankers Association 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."
Coinbase Canada holds an Ontario Securities Commission permission granted this year to offer yields on eligible tokens, provided it warned customers about the risks and made clear the funds are not covered by deposit insurance. The draft's wording covers interest paid "including through third parties," which on its face reaches the intermediaries distributing a token, not only the issuer.
Non-bank issuers' reserves would have to equal the value of their circulating fiat-pegged tokens and sit with qualified Canadian financial institutions: banks, credit unions and trust companies.
Canadian deposit-takers are already building their own rails. In late September, the country's six largest banks said they were exploring a Canadian-dollar tokenized system to move money faster among traditional financial institutions, as Private Wealth Daily previously reported. That followed a Sept. 10 statement from the Office of the Superintendent of Financial Institutions that tokenized deposits are "not legally distinct from traditional deposits." Tetra Trust Company launched CADD, a Canadian-dollar stablecoin approved by Alberta Treasury Board and Finance, in May.
Submissions are due Dec. 23; final regulations would bring the Stablecoin Act into force.
Reported by the Regulation desk from CoinDesk Policy. Published . Corrections