Coinsquare To Release First Canadian Dollar Stablecoin ‘eCAD’
Canadian crypto exchange Coinsquare has announced that it plans to launch a stablecoin backed by the Canadian dollar (CAD).
The new stablecoin, to be known as eCAD, will be pegged on the country’s dollar at a ratio of 1:1, the exchange announced via a press release published on Thursday.
The exchange’s CEO Cole Diamond stated that the token provides the “first transparent, affordable, and secure way of transferring value in Canada and beyond.”
As per the firm, the “eCAD” token will facilitate a number of key transactions in the crypto ecosystem, including in cross-border payments and remittances.
Other potential use cases will involve peer-to-peer lending, merchants’ adoption for crypto payments, and in trade settlements and for foreign exchange (forex) conversions.
Coinsquare has promised that every eCAD token in circulation will be backed by one Canadian dollar held in reserve.
Although this pledge ties in with the need to remain transparent as claimed in the press release, the exchange did not provide details of how proof of the said reserves would be availed to the public.
The announcement did not also detail a timeline within the anticipated stablecoin will launch.
Coinsquare’s move to launch a stablecoin follows its recent acquisition of a Bermuda-based decentralized exchange (DEX) called StellarX. The Canadian firm fully owns the platform, for
The crypto exchange itself is backed by Canaccord Genuity, a financial services firm that helped raise $30 million in equity funding for the exchange in 2018.
Coinsquare had stated at the time that the funding would be used to stimulate further growth as the exchange looked to go global with various offerings and services. The diversification policy aimed at making the exchange offer what its customers needed.
Remarkably, the firm received a boost to its reputation after reg-tech startup Coinfirm labeled it a “low risk” exchange. The platform has the necessary licenses and adheres to stringent know-your-customer (KYC) regulations. Customers are also subjected to strict anti-money laundering (AML) policies to help cut the potential for illicit activities.
The release of the eCAD token follows the massive activity witnessed in the stablecoin sub-industry even as experts point out that these projects could help drive crypto to the mainstream adoption.
Other than U.S. dollar-backed cryptocurrencies, firms have announced the launch of (or plans for the same) for tokens backed by other fiat currencies like the Australian dollar, Japanese Yen, the euro, and the British pound.
Among the latest fiat-backed stablecoins is a project by startup TrustToken, which announced a stablecoin pegged to the British pound.
Cryptocurrency exchange Bittrex is also among a group consisting of five blockchain firms that recently announced the launch of a stablecoin pegged on the euro. The token will ostensibly allow for staking, with users eligible for returns of up to 8 percent in profits.
Meanwhile, pioneer stablecoin, tether (USDT), controversial for its lack of transparency regarding fiat reserves, announced recently that indeed its collateral may not be in U.S. dollars only.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.