Canada Opens Stablecoin Consultation, Keeps Holder Yield Ban

Canada’s Department of Finance put draft stablecoin regulations in the Canada Gazette on October 24, 2026, per Cryptobriefing, beginning a 60-day public consultation that ends December 23, 2026, at 11:59 p.m. EST. The draft leaves one policy choice settled: issuers cannot pay holders interest or yield for simply holding tokens.

The rules sit under the Stablecoin Act, which received Royal Assent on March 26, 2026, through Bill C-15. Cryptobriefing noted Finance officials took roughly seven months to turn the law into draft regulations.

Key facts

• Draft rules were published October 24, 2026, opening a consultation that closes December 23, 2026, at 11:59 p.m. EST (Cryptobriefing).
• Non-bank issuers of fiat-backed stablecoins with interprovincial or international reach would need to register with the Bank of Canada.
• Reserves must match outstanding tokens daily and be held in high-quality liquid assets by Canadian custodians.
• Redemption at par would carry a three-business-day processing window and a 1% fee cap for small holders (Cryptobriefing; Blockonomi).
• The OCC issued its final GENIUS Act rule on October 21, 2026, keeping the yield ban but dropping a proposed presumption against affiliate-routed rewards (Forexcrunch).

Registration, reserves and redemption terms

The framework would extend federal oversight to non-financial institutions issuing fiat-backed stablecoins, while a token used only within one province would stay outside it. Banks and prudentially regulated institutions are excluded and keep working on tokenized deposits or Canadian-dollar stablecoins under existing supervision.

On redemption, Blockonomi reported that covered holders could redeem any amount with no minimum, a point Cryptobriefing did not detail. The 1% fee is a ceiling rather than a fixed rate, and issuers would need at least seven days’ website notice before adding or raising fees, according to Blockonomi. Issuers could set daily limits only where liquidity shortages in reserve-asset markets block all requests, with the fee cap still applying.

Blockonomi also reported that permitted reserve assets include demand deposits, short-term government debt, qualifying money-market funds and certain overnight repurchase agreements, held separately from creditor claims, and that issuers could not describe tokens as insured bank deposits. Blockonomi compared Circle’s USDC terms, updated October 15 for holders outside the European Economic Area, which tie direct redemption to a Circle Mint account open to institutions and registered distributors. Whether USDC falls under Canada’s rules remains unclear.

The U.S. rulebook and what changed

Forexcrunch reported the Office of the Comptroller of the Currency issued its final GENIUS Act rule on October 21, 2026, effective January 18, 2027. The withdrawn proposal would have presumed that issuer payments routed through an affiliate to holders for simply holding coins counted as prohibited yield. Comptroller Jonathan V. Gould said the agency delivered the rule ahead of schedule, and the OCC will instead assess each rewards arrangement case by case. Pre-existing programmes get no grandfathering and there is no de minimis safe harbour, though enforcement discretion applies.

Why it matters

Both jurisdictions converge on the same principle: a payment stablecoin is a payments tool, not a savings product. For issuers, Canada’s draft brings clarity on registration, reserve custody and redemption, but daily reserve matching and Canadian custody add cost, and firms earning a spread on reserves lose that lever. The OCC framework leaves exchange rewards programmes in a case-by-case zone.

What to watch

Between now and December 23, the redemption window, the 1% fee cap and the definition of transaction-based rewards are open for comment. Cryptobriefing reported the regulations are expected to take effect in fall 2027, with around 30 crypto firms expected to register as payment service providers.

Disclaimer: This article is for information only and is not investment, financial or trading advice. Cryptocurrency prices are highly volatile. Always do your own research.

Sources: Crypto Briefing, Blockonomi, Forexcrunch