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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.
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.
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.
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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
