What’s a horse’s favourite type of cryptocurrency? A ‘stable’ coin!
Hahaha! Well, with that out of the way, let’s move on to the story.
What happened: The first Canadian dollar-backed stablecoin issued by a financial institution is officially trading on three blockchains after receiving approval from the Alberta Treasury Board. The token, called CADD, is the creation of Calgary-based company Tetra.
Tetra, which formed last year as a new parent company of Tetra Trust, received backing from Shopify, Wealthsimple, and National Bank to get CADD off the ground.
Catch-up: In case you need a refresher, stablecoins are cryptocurrencies designed to be less volatile by being pegged to another store of value, usually fiat currency. In March, Ottawa gave royal assent to legislation regulating domestic private-sector stablecoin issuers.
Why it matters: Right now, anyone using stablecoins in Canada is almost certainly using ones pegged to the U.S. dollar. As stablecoin use grows, crypto advocates argue that adopting a loonie-pegged coin is vital for continued sovereignty against the dominant USD.
The field could soon be filled with options outside of CADD. For example, Stablecorp is working with Deloitte to integrate its QCAD token into Canada’s financial system.
Yes, but: This could end up being a not-so-groundbreaking development if stablecoin use doesn’t pick up among average consumers. A recent study by the Federal Reserve Bank of Kansas City found that just 0.7% of stablecoins are used for payments, and more than a fifth straight up aren’t used at all.—QH
