Canadian Financial Institution Launches World’s First Stablecoin Backed by Bank Deposits
- Canadian-based bank, VersaBank, announced the launch of its digital stablecoin, VCAD, which is backed 1:1 by Canadian dollar bank deposits by the bank.
VersaBank, a North American banking leader in B2B digital payment solutions, announced its plans to launch VCAD, the “world’s first digital currency backed by a North American bank deposits”. The stablecoin aims to offer users a channel of commerce while offering the highest levels of stability and security on its system.
The VCAD stablecoin is as a result of a partnership between VersaBank and Stablecorp, a joint venture between crypto asset manager, 3iQ and Mavenet, a blockchain development firm, both Canadian firms too. The partnership will ensure the commercial launch of VCAD, with VersaVault, a digital bank vault under VersaBank’s cybersecurity subsidiary, DRT Cyber Inc., securely managing the stablecoin.
The VCAD project is expected to launch in the coming months, a statement from the team further stated.
VCAD allows consumers and businesses to leverage the benefits of stable tokens such as removing the wild volatility experienced across the crypto market or fiat currencies. Moreover, users will also enjoy the security of a fully-backed stablecoin through the bank deposits, David Taylor, President of VersaBank and DRT Cyber Inc. said in a statement.
“Consumers and businesses purchasing products and services with VCAD will finally know the precise value of their digital currency when executing these transactions.”
At launch, VCAD will be issued to financial intermediaries working with VersaBank in exchange for Canadian dollar deposits. These partners and intermediaries will then offer the stablecoin directly to users and businesses allowing them to redeem for Canadian dollars and payment purposes at any time. Jean Desgagne, CEO, Stablecorp said,
“VCAD provides consumers with not only the security afforded by an underlying deposit with a Canadian chartered bank but also the comfort of knowing that each VCAD issued or redeemed will always have one-to-one value with the Canadian dollar.”
Stablecoins are rapidly gaining acceptance across Canada as a bank of Canada official, Deputy Governor Tim Lane, praised the innovation over “flawed Bitcoin” as a payment channel.