Canada's Draft Stablecoin Rules Cap Redemption Fees at 1% and Ban Yield
The Canadian draft requires one-to-one reserves for every stablecoin, redemption within three business days and bans paying interest for simply holding tokens.
Canada on Saturday published draft rules for stablecoin issuers, as reported by Decrypt. The proposal appeared in the Canada Gazette, the government's official newspaper. It would require every token to be backed by real money that holders can get back on request.
What the draft says
Reserves must match the coins one-to-one. They would be limited to cash, government debt maturing in three months or less, and money market funds holding only such assets. The reserves must be kept 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 simply holding a coin, including indirectly, for example by sharing the issuer's income. Rewards tied to using a coin rather than holding it would stay allowed. Issuers also could not present a stablecoin as a bank deposit or claim deposit insurance or a government guarantee. Complaints would have to be acknowledged within seven days and resolved within 30.
Oversight and timeline
The Stablecoin Act became law on March 26, 2026, and the Bank of Canada will register and supervise issuers. Penalties would range from 1 million to 10 million Canadian dollars for serious violations. The notice assumes five issuers and about 30 payment companies. Comments are open for 60 days, until roughly December 23, and the rules are intended to take effect in fall 2027.
In the United States, the GENIUS Act likewise bars issuers from paying holders interest. We covered the US stablecoin rules under the GENIUS Act earlier.
For people who use stablecoins, including for USDT exchange, such rules show how regulators approach reserves and redemption terms.
Source: Decrypt
