Canadian Bank Will Launch Dollar-Backed Digital Currency Soon

Stablecorp CEO Jean Desgagne said that VersaBank's digital currency was intended to provide an alternative to concerns about volatility and security in the cryptocurrency markets.

February 25, 2021 | AtoZ Markets – In an announcement Wednesday, VersaBank said it plans to launch a digital currency called VCAD, which will supposedly be backed by Canadian dollars deposited with the bank.

The Canadian bank claimed that VCAD would effectively be "the first digital currency to represent a fiat currency" issued and backed by a North American bank.

VersaBank Will Make Digital Currency Publicly Available

VersaBank said it had partnered with Canada Stablecorp, a joint venture between mutual fund manager 3iQ and blockchain firm Mavennet, to launch the "stablecoin." The bank plans to make VCAD publicly available "in the coming months" by issuing the digital currency to its "financial intermediary partners" in exchange for Canadian dollar deposits. Those partners could offer VCAD directly to individuals and other companies.

Stablecorp CEO Jean Desgagne said that the digital currency was intended to address "two main shortcomings of the traditional cryptocurrency market," namely volatility and security. The bank also plans to develop digital currencies issued by banks backed by the US dollar and the euro called VUS and VEuro, respectively.
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VersaBank is one of the few fully digital financial institutions - there are no physical bank branches in which to transact. In addition, its subsidiary launched a digital safe to store cryptocurrencies.

Though not backed by a bank, 3iQ and Mavennet have already launched a regulated stablecoin pegged to the Canadian dollar. Earlier this month, the companies introduced an ERC-20 token called QCAD , which already has more than 170,000 tokens in circulation at a price of $ 0.7854, according to Etherscan, roughly $ 133,000.

Furthermore, VCAD is not the only stable currency pegged to the Canadian dollar in the Canadian market. Coinsquare currently supports eCAD and TrustToken's TrueCAD Token (TCAD).

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