There’s A Canadian Dollar-Pegged Stablecoin On The Horizon

Coinsquare, the Canadian cryptocurrency exchange is set to launch stablecoin pegged 1:1 to the Canadian dollar (CAD).

The exchange has stated that it has plans to utilise its “eCAD” token for cross-border payments, remittance, peer-to-peer lending, merchant payment services, trade settlements and forex conversions.

CEO of Coinsquare Cole Diamond stated in an announcement on Thursday:

“The launch of eCAD will create the first transparent, affordable, and secure way of transferring value in Canada and beyond, without the risk of instability in the traditional cryptocurrency market.”

The firm has promised that each eCAD token will have on Canadian dollar to back it in reserve. While Coinsquare did pledge transparency in its announcement, it did not go into detail as to how it would prove its reserves to the public.

This news comes hot on the heels of Coinsquare’s recent acquisition of the decentralized exchange (DEX) StellarX for an undisclosed amount. However, StellarX is now a fully owned subsidiary of Coinsquare based in Bermuda.

Furthermore, Coinsquare is backed by a financial firm named Canaccord Genuity, after having accumulated $30 million in equity back in 2018. According to the exchange at the time, the funding “will be used to fuel a global growth plan and diversification strategy focused on making the platform even more responsive to mainstream customers’ needs.”

Notably, the platform was also recently dubbed as a “low risk” exchange by Coinfirm, a reg-tech company, thanks to having licenses and stringent know-your-customer (KYC) and anti-money laundering (AML) policies.

The Canadian exchange’s launch comes during a time where a torrent of stablecoin launches has happened in the last year. Most recently, TrustToken, a crypto startup, launched its own stablecoin pegged 1:1 to the British pound and Bittrex as well as five other crypto firms announced euro-pegged stablecoins.

Tether (USDT) which is the oldest and still most widely used stablecoin, has been under fire for its lack of independent audits of reserves and recently announced that its collateral backing the tether token may not be 100% backed by the US dollar.