The draft Canada stablecoin rules arrived in the Canada Gazette Part I on October 24, and they land with the subtlety of a Mountie at a poker game: 100% reserves, redemptions settled within three business days, and a hard ban on paying people simply for holding a token. Issuers have until December 23, 2026 to file comments before the regulations – the missing piece of Canada’s Stablecoin Act, which received royal assent on March 26 – are finalized, expected around fall 2027.
What the draft rules actually require
Reserves must match or exceed outstanding tokens at the end of every day, held with a qualified Canadian financial institution through a Canadian-incorporated custodian, in segregated, bankruptcy-remote accounts – one per token. Eligible assets are deliberately narrow: cash and demand deposits, government debt with three months or less to maturity, one-business-day reverse repos, and money market funds built entirely from those same instruments.
Redemption holders get a clear right to par redemption, with payment due within three business days, a fee capped at 1% of value, and no minimum amount. Issuers may withdraw reserve income only while remaining reserves still cover every token in circulation. Monthly reporting to the Bank of Canada, certified by an accountant, keeps the paperwork honest.
No yield, no dressed-up equivalents
The yield ban covers direct and indirect interest – including issuer-funded third-party arrangements tied to holding or holding longer. Rewards linked only to actually using the token remain allowed. Issuers also cannot describe their tokens as bank deposits or imply deposit insurance or a government guarantee. The Canadian Bankers Association has publicly backed the explicit ban, which tells you where domestic sentiment sits.
How Canada stacks up against the GENIUS Act
Ottawa’s playbook draws on the U.S. GENIUS Act and FSB guidance, aiming at international recognition, but the details diverge. Canada allows three business days for redemption against the OCC rule’s two, caps redemption fees at 1% where the OCC rule sets no percentage cap, permits four reserve asset types without a composition limit versus the OCC’s 5% daily-liquidity and 40% per-counterparty caps, and requires a Canadian-incorporated custodian. Both regimes ban holding-based yield. The OCC finalized its GENIUS Act rule on October 21, effective January 18, 2027.
What happens next
The consultation runs 60 days, closing December 23, 2026. In the backdrop: Canada’s six largest banks launched an interbank tokenized-deposit initiative in September, and OSFI has said tokenized deposits are not legally distinct from traditional deposits – so the rulebook is being written while neighboring products are still finding their labels. For earlier context on Ottawa’s direction, see our coverage of the Bank of Canada’s stablecoin regulation playbook.
