Canada's draft stablecoin rules ban yield sharing and bring software wallets into scope

Canada’s Department of Finance has released draft regulations under the Stablecoin Act, opening a 60-day public consultation that closes on 23 December. The rules are provisionally scheduled to take effect in autumn 2027 and would require non-bank stablecoin issuers to register with the Bank of Canada, hold fully backed reserves, and file monthly reports verified by an accountant.

Three structural choices distinguish the Canadian framework from its peers. First, the yield prohibition goes materially further than the United States GENIUS Act: where GENIUS bars issuers from paying interest but leaves exchanges free to share revenue with holders (a gap Coinbase has exploited with USDC), Canada targets the underlying funding arrangement. Issuers would be barred from entering any income-sharing deal with intermediaries that results in holding-based rewards, regardless of which entity actually distributes the payment. Rewards tied to transacting rather than holding would remain permissible. Second, software wallets are brought within the payments regulatory perimeter, a step most comparable regimes have deferred. Third, the Bank of Canada takes on both registrar and supervisory functions, a dual role that few central banks have assumed in stablecoin governance.

Because these are draft regulations under an active consultation, the precise contours remain open to revision before the expected 2027 commencement. Operators with Canadian distribution or issuer arrangements have until 23 December to engage, and the intermediary-level yield prohibition in particular is likely to attract industry comment given its divergence from the US approach.