• CoinDesk reports a 60-day consultation on draft stablecoin regulations, closing December 23.
• Issuers would be barred from paying interest, directly or through third parties, but transaction-linked rewards would remain allowed.
• Non-bank issuers must hold reserves equal to circulating tokens at qualified Canadian institutions, and redeem within three business days with fees capped at 1%, per CoinDesk.
• Finance Canada says non-financial issuers must apply for registration with the Bank of Canada.
• The rewards carve-out is the pressure point: CoinDesk reports the Canadian Bankers Association backs the ban, while Coinbase Canada holds Ontario permission to offer yields on eligible tokens.

Canada has kept its prohibition on stablecoin yield in the draft regulations released for consultation, while leaving room for transaction-linked rewards. CoinDesk reports that the Department of Finance Canada opened a 60-day consultation on drafts that would put the Stablecoin Act into operation, with comments closing December 23. The open question is where interest ends and rewards begin.

What the draft requires of issuers

Non-bank issuers would have to hold reserves equal to their circulating fiat-pegged tokens, placed with qualified Canadian institutions such as banks, credit unions and trust companies, according to CoinDesk. Customers must be able to redeem for regular currency within three business days, with redemption fees capped at 1%. Finance Canada's framework page says non-financial issuers must apply for registration with the Bank of Canada.

The yield ban and the rewards carve-out

The draft bars issuers from paying interest, including through third parties, but CoinDesk reports that transaction-linked rewards would still be allowed. That distinction carries the commercial weight. A reward tied to spending can resemble a return on holdings, so the final wording on what counts as indirect interest will decide how much room distributors and wallets keep for incentives.

Banks versus crypto platforms on yield

The positions are already split. CoinDesk reports that the Canadian Bankers Association supports the Act's explicit prohibition on yield. Coinbase Canada, by contrast, has received Ontario permission to offer yields on eligible tokens, per the same report, so provincial securities treatment and the federal stablecoin regime may pull in different directions. The consultation is where that tension is likely to surface.

What to watch before December 23

Issuers and distributors should read the definition of indirect interest and the scope of permitted rewards first, since those determine whether reward programs survive. Reserve placement limited to Canadian institutions and the 1% redemption-fee cap bear directly on issuer economics. CoinDesk reports the framework is expected to take effect toward the end of 2027, leaving time for the text to change.