Canada proposed draft rules on Saturday requiring companies that issue stablecoins to back every coin with real reserves and return funds to holders on request, while maintaining a ban on paying interest, or yield, to holders.
The draft was published in the Canada Gazette, the government's official newspaper. It follows the Stablecoin Act, which became law on March 26, 2026, after Ottawa announced the plan in its November budget. The Bank of Canada will register and supervise issuers.
Key requirements
- Every coin must be backed one-to-one by reserves limited to cash, government debt maturing in three months or less, and money market funds holding only such assets.
- Reserves must sit with a Canadian custodian in separate accounts that creditors cannot reach if the issuer goes bankrupt.
- Holders could redeem any amount within three business days, with fees capped at 1%.
- Issuers could not pay interest for holding a coin or route yield through third parties; any arrangement letting someone earn yield from holding a coin, including sharing the issuer's income, counts as indirect payment. Rewards tied to using a coin, rather than holding it, would stay allowed.
- Issuers could keep what their reserves earn, as long as reserves stay at least equal to coins outstanding.
- Issuers could not present a coin as a bank deposit or claim deposit insurance or a government guarantee.
- Complaints would need acknowledging within seven days and resolving within 30.
"These prohibitions are intended to distinguish stablecoins from financial products that compete directly with bank deposits or other interest-bearing instruments," the notice says.
