Canada's stablecoin regulatory draft prohibits issuers from paying yields and requires reserves to be held at banks.

On Oct. 26, according to Cryptopolitan, Canada released a stablecoin regulatory draft on October 24 in the Canada Gazette, prohibiting issuers from paying direct or indirect returns to holders, including platform activity rewards permitted by some US platforms. The draft requires non-financial institutional issuers to register with the Bank of Canada, maintain high-quality liquid assets in the denomination currency as reserves at a 1:1 ratio, support redemptions at par value, and deposit reserve assets into banks. Already prudentially regulated entities such as banks and trust companies are excluded from this issuer framework, and tokenized bank deposits may continue to earn interest and remain eligible for deposit insurance. The proposal initiates a 60-day consultation period, with the Department of Finance anticipating that the regulations will take effect in 2027. The Canadian Bankers Association has endorsed the yield ban, while Stablecorp CEO Kesem Frank advocates emulating the US model to allow partial rewards.