Canada’s draft stablecoin regulations keep a ban on paying interest to holders, even through third parties, and the rules land just days after U.S. regulators finalized a regime that is still weighing how to allow stablecoin rewards.
The Department of Finance published the draft regulations in the Canada Gazette on Oct. 24, opening a 60-day public consultation that closes Dec. 23. The rules are written to bring the Stablecoin Act, passed through Bill C-15 earlier in 2026, into force; the government says they would prescribe the elements needed for issuers to register with the Bank of Canada.
The ban is not new. The Stablecoin Act already prohibited yield, direct and indirect, when it passed. What the draft regulations do is carry that prohibition into the operating rules, while still permitting rewards linked to transactions. The Canadian Bankers Association, which pressed for the ban over concerns that customers would move money out of bank accounts, remains firmly behind it. A spokesperson for the group said it “firmly supports the Stablecoin Act’s explicit prohibition on yield, both direct and indirect.”
The divergence with the United States is the point of comparison for issuers. The U.S. Office of the Comptroller of the Currency issued its final rule implementing the GENIUS Act on Oct. 21, the final stablecoin rule that takes effect in January 2027, and American regulators are still weighing how to treat stablecoin rewards. Canada has now drawn the line before the framework takes effect, expected toward the end of 2027, a date reported rather than a published commitment. Issuers operating on both sides of the border will have to run one rewards design in the U.S. and strip it out in Canada.
Canada’s boundary between banks and stablecoin issuers is also firmer than the U.S. version. The Office of the Superintendent of Financial Institutions has said tokenized deposits are “not legally distinct from traditional deposits,” keeping banks under their existing prudential regimes while non-bank issuers register with the Bank of Canada.
Comments on the draft are due by Dec. 23, 2026.
