Canada’s Department of Finance has published draft regulations under its Stablecoin Act (SCA), opening a 60 day consultation that runs until December 23. The rules are expected to take effect in fall 2027 and would require non bank stablecoin issuers to register with the Bank of Canada, maintain fully backed reserves and submit monthly accountant verified reports.
Three features stand out. Canada’s yield ban goes beyond the issuer level prohibition in the US GENIUS Act by targeting income sharing arrangements between issuers and third parties. Software wallets are pulled into payments regulation. And the Bank of Canada sits at the center of the regime as both registrar and supervisor, a role few central banks have landed.
On yield, GENIUS bars issuers from paying interest on stablecoin balances but leaves exchanges free, which is why Coinbase can share yield with USDC holders. Canada adds a layer. Issuers cannot enter any arrangement, including income sharing with intermediaries, that results in holding based rewards. The target is the funding mechanism, not just the entity paying out. Rewards tied to transacting rather than holding are still permitted.
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