Business · Markets · 7 hrs ago
Canada proposes stablecoin rules that restrict interest payments
Canada has proposed rules for stablecoins, digital assets designed to keep a steady value against a currency or another financial asset.
The draft rules follow the Stablecoin Act’s approval in March 2026 and aim to set out how these assets can be used in the country.
Issuers would need to meet strict reserve requirements and keep assets separate, while giving customers clear redemption rights.
They would have to redeem stablecoins within three business days of a request, with no minimum amount.
The draft would restrict interest payments to holders, although rewards tied to transactions would be allowed.
Supporters say stablecoins could make payments faster and cheaper, while critics warn that interest payments could draw deposits away from Canadian banks.
The rules are open for 60 days of public consultation, and industry groups have raised concerns that the limits could put Canada behind the United States on rewards for stablecoin holders.
Canada has proposed draft rules for stablecoins that would restrict platforms from paying interest to token holders.
The rules would require Canadian issuers to redeem stablecoins within three business days of a request, with no minimum redemption amount.
Crypto industry figures welcomed some consumer protections but warned that the yield restriction could put Canada at a disadvantage.
Critics say interest payments could draw deposits away from Canadian banks.
The draft regulations are open to a 60-day public consultation.
- Who
- The federal government proposed the rules; Canadian stablecoin issuers and platforms would be affected.
- What
- The draft would set stablecoin requirements, including reserve and redemption rules, and restrict interest payments to holders.
- When
- The draft rules were published last Friday, before the article was published on October 28, 2026.
- Where
- Canada.
- Why
- The rules aim to establish a legal framework for stablecoins and support consumer protections. The article says proponents see potential for faster, cheaper payments.
Stablecoin industry figures
Critics concerned about bank deposits
Yield payments
Stablecoin industry figures
Industry figures say allowing yield could make stablecoins more useful and help Canada compete.
Critics concerned about bank deposits
Critics warn that interest payments could draw deposits away from Canadian banks.
Regulatory approach
Stablecoin industry figures
Industry figures welcomed the draft’s clarity and consumer protections but objected to the yield restriction.
Critics concerned about bank deposits
Critics say stablecoin yields could exceed the average yield on a savings account.
U.S. legislation defined stablecoins and set out rules for policing them.
Canada’s Stablecoin Act received royal assent.
Canada published draft stablecoin regulations for public consultation.
- Consultation period
- 60 days
- Redemption deadline
- Within three business days of a request
- Minimum redemption amount
- None
- Stablecoin Act
- Received royal assent in March 2026
- Draft rules published
- Last Friday, according to the article
What people are saying
Canada had a chance to lead globally in terms of issuers being able to provide yield.
The issuers just end up holding that yield that they’re generating, rather than being able to provide that to the customers.
a smart move
And the worry from the banks is yields on stablecoin payments are much higher than the average yield on a savings account.