• The Canadian government has opened a 60-day public consultation on draft stablecoin regulations, according to Finextra, and the drafts reportedly keep the ban on yield payments.
• The Stablecoin Act, passed through Bill C-15, bars issuers from offering interest or yield to holders, per the Department of Finance.
• Issuers must hold segregated, high-quality liquid reserves matching the stablecoins minted and must offer redemption at par.
• The Bank of Canada supervises issuers; non-financial issuers must register with it.
• The Department of Finance expects the framework to take effect in 2027.

Canada has opened a 60-day public consultation on draft stablecoin regulations that would keep a ban on paying yield to holders, according to Finextra. The drafts implement the Stablecoin Act, which the Department of Finance describes as part of Bill C-15. The yield ban is the structural choice that matters most: it defines a stablecoin as a means of payment and settlement, not a savings product, and shapes the economics of every issuer that registers.

The yield ban sets the business model

The Department of Finance states that issuers must not offer interest or yield to stablecoin holders. Because reserves must be held in cash or cash-like assets, an issuer can still earn income on them, but it cannot pass that income to holders. The incentive follows directly: revenue comes from fees, partnerships and payment volume rather than from competing with bank deposits on rate, which narrows the route for distributors seeking to attract balances.

Reserves and redemption are the operational test

The Department of Finance says issuers must hold a 1:1 reserve of high-quality liquid assets in the stablecoin's reference currency, segregated with a qualified custodian and shielded from creditors other than holders in insolvency. Issuers must also offer redemption at par under a published policy covering timing, manner and fees. The draft regulations are where those principles become operational detail, so the consultation is where compliance teams should look for custody, timing and fee specifics.

The Bank of Canada becomes the gatekeeper

According to the Department of Finance, the Bank of Canada administers the framework and supervises issuers. Issuers that are not financial institutions must register with it and meet its prudential requirements, and it can enforce compliance through compliance agreements and administrative monetary penalties. For fintechs, that makes the central bank the single counterparty for market entry, and the registry the point at which doubts about reserve quality are likely to be resolved.

What to watch before 2027

The Department of Finance says the regulations will be published in the Canada Gazette for consultation and finalized over 12 to 18 months from early 2026, with the regime expected in force in 2027. The unresolved questions are practical: how distributors may reward customers without breaching the yield ban, and how redemption timing is specified. Payment firms and banks integrating stablecoins should map those points against their own product design now.