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

According to Cryptopolitan, Canada published a draft stablecoin regulation in the Canada Gazette on October 24, prohibiting issuers from paying direct or indirect returns to holders, including platform activity rewards permitted by some U.S. platforms. The draft requires non-financial institution issuers to register with the Bank of Canada, maintain reserves of high-quality liquid assets in the denomination currency at a 1:1 ratio, be redeemable at par value, and hold reserve assets in banks. Banks, trust companies, and other prudentially regulated institutions are exempt from this issuer framework, and tokenized deposits at these institutions may continue to pay interest and remain eligible for deposit insurance. The draft opens a 60-day consultation period, and the Department of Finance Canada expects the rules to take effect in 2027. The Canadian Banking Association has expressed support for the return ban, while Stablecorp CEO Kesem Frank advocates following the U.S. approach to allow certain rewards.