A Calgary -based financial company has raised $ 10 million to create a digital version of the Canadian dollar, with the support of Shopify, Wealthsimple and National Bank, pushing Canada to the global race to digitize the money.
Tetra Digital, a group of financial services, plans to launch a Canadian stablcoin next year. The stablecoins are a type of cryptocurrency linked to the national currency of a country, such as the Canadian dollar, or a product like gold.
The idea is that these tokens are a digital replica one by one of their real world assets. For example, a stablecoin backed by Canadian dollar could be exchanged for a real Canadian dollar at any time or place in the world without additional rates.
“There are many of us Stablecoins at this time,” said Didier Lavallee, CEO of Tetra Digital, who told CBC News that he believes that his company will satisfy what he believes is an imminent demand for these digital assets.
“If you are a Canadian business, you want to be able to make transactions in a vehicle or product or token called in Canadian,” he said.
Finally, Stablecoin Defensora as Lavallee want Canadians to use Stablecoins to pay online purchases and send money to family or friends from all over the world without additional delays or costs.
Those who defend Stablecoins say they come with the ease of exchanging cryptography without any of the volatility (hence their name). The exchanges are made in a block chain, which is a system that records and verifies transactions between computers, instead of through traditional banking systems.
While that makes exchanges faster, it is a concern for experts who care that stable, such as other cryptocurrencies, lack the security infrastructure that banks have to detect and stop illegal financial transactions.
Pressing for regulation
Canadian defenders, worried that the country is staying behind in cryptocurrencies, have been urgently pressed to the federal government to regulate tokens so that companies have a framework to issue their own stamps backed by Loonie.
That is what the United States government did this summer when it approved the Genius law, opening the door to the main US companies such as Walmart to issue coins backed by USD.
The industry greatly saw the movement of the Trump administration as legitimation of this type of currency, while other countries saw it as a catalyst to regulate their own established, so that they do not stay behind. Experts say that China is especially concerned that the United States will dominate the digital currency space, and will reaffirm the domain of a weakened US dollar, if the established established in USD flourishes.
Canadian currency champions have shared similar concerns, calling it a matter of economic “sovereignty” for Canada to have their own stable.
“We like it or not, when we make transactions a stablecoin called in the United States, we are essentially supporting [the] The United States Treasury in US dollars, “said Lavallee, who explained that his perspective is that Stablecoin’s purchases will finance purchases of the Canadian dollar that, from a broad perspective,” will help support our Canadian economy versus essentially outsourcing transactional dollars. “
The stables are similar but different from the digital currencies issued by the Central Bank (CDBC). The Bank of Canada launched plans for its own Loonie Digital last year, saying that it would focus on investigating the global digital asset sector.
Ottawa needs to advance regulation, they say executives
Some authorities in Canada currently consider that Stablecoins is values, a classification to which the cryptographic industry has greatly opposed, preferring that the currencies are regulated as e-topakens, similar to the approach adopted by the United States and the EU.
Being regulated as values could, in many jurisdictions, average digital assets are governed by the same laws as similar actions or investments, while legislation as a recent US law requires that companies that issue stable that have sufficient “traditional” currency to support the digital currency.
Coinbase, a cryptocurrency trade platform that invests in Tetra, is among the companies that urge Ottawa that the ball is launched in an updated regulatory framework for Stablcoins.
“A stablecoin called Canadian would help with payments, would help with cross -border transactions, and help with all the currencies we have here in Canada,” said Lucas Matheson, CEO of Coinbase Canada.
Up to this point, Canadian companies who want to broadcast Stablcoins have not had the regulatory clarity they need to advance these projects, Matheson said.
Because the stables must be backed by material assets, a basic framework would include clear rules on reserves, such as what percentage of currencies can be backed by cash assets versus treasure bonds.
“For a great country of the G7, you must ensure that you can project your currency, and have a stablecoin in the future will be an important part of that,” said Tom Duff Gordon, vice president of international politics in Coinbase.
“I think there are foreign investors who want to retain Canadian dollars and do it in [Canadian dollar-backed]regulated stablecoins will be easier [way] To do that. “
Skepticism and uncertainty about global regulations
The safety and stability of Stablecoins, regardless of its currency called, remains a great question sign for at least one expert in Canadian cyber law.
“Show me that you really have the assets to support this, and that they are liquid assets and that they are stable assets,” said Brent Arnold, founder of Toronto Law Firm Legal and president of the Canadian Internet Society.
“If these conditions are not in their place and nobody ensures that they are in their place, they could still end up in a situation in which everyone realizes that the Token is worthless, there is a race in the bank and has a collapse.”
Arnold, who practices the cybersecurity law, says that there is still a lack of clarity on how the law can and will deal with cryptocurrencies or stable.
“There is always friction when it invests in something that is treated in one way for a country and otherwise by other countries, “he said.
However, the presence of what Arnold called “very credible players”, including Wealthsimple, National Bank and Shopify, could indicate that companies are responding to consumer demand.
Shopify did not respond to a CBC news request for comments on this story. In a press release, WealthSimple’s legal director described the launch of the Canadian stable of Tetra as a “defining moment for the digital economy of Canada”, while the National Risk Capital Division of the National Bank promised “the safeguards necessary to support Canadians and companies in the future.”
But Arnold says that he is not still sure that anyone needs a Canadian stablcoin, saying that he is “skeptical” about how much demand there is in Canada for this product.
“I still have to see a really good and convincing explanation of why this is necessary or anything else than a solution in search of a problem.”
