Canada is one of the countries that hasn’t yet embraced cryptocurrency but that might be changing as the news about the launch of Canadian Stablecoin and the desire from the national bank to work closely with the industry professionals emerge.
Canada has not been overly enthusiastic about promoting cryptocurrency or making it accessible to the masses. Canada Stablecorp came to be as a result of the joint venture by 3iQ, an asset manager and Mavennet System, a blockchain developer. Now the company will offer the users a new stable coin cryptocurrency that is pegged to the Canadian dollar. This is a huge deal for not only the local cryptocurrency industry but for the financial market infrastructure of the country in general. While still following the same technology like cryptocurrency, stablecoin has minimized volatility, which makes it safer and more appealing to bigger corporations, specifically national banks.
What does this mean for Canada’s financial sector?
This could open many doors for those wanting to explore the cryptocurrency world but wanting to play it on the safer side. While the technology behind cryptocurrency will continue to intrigue people around the world, the novelty of it all often scares people away. Stablecoin offers way more security to the user and could actually have a bigger following in the country. The stablecoin is called QCAD and was built on Ethereum blockchain, one of the most popular cryptocurrencies in the world and is already available on Bitvo, a crypto exchange platform. The stablecoin can be used for b2b transactions, but also can be applied to value chains like food, oil, and gas. QCAD also has the backing of the digital form of liquidity.
The growing presence of cryptocurrencies in the global economy is now undeniable, they are used in various industries and have become very popular in a short period of time. As the novelty is slowly starting to wear off and people realize that there is actually a lot of benefit to using crypto, many industries have capitalized on that. The innovation has provided an increased level of safety, specifically for online entertainment. Crypto casinos have a huge following and have made the transactions between the casino and the customer much easier. The same goes for many businesses that offer online transactions
The company behind QCAD is excited to open many doors for the local market, which is definitely ready for changes like that. Canada was previously exposed to stablecoin when Blockchain Venture Capital launched CUSD, the first USD-stablecoin in Canada and which turned out to be a success.
Why the change in attitude?
It looks like the attitudes around cryptocurrency are changing across the country, even though the industry had a rough year. The crypto industry reputation was not only damaged in Canada, but it was tainted all around the world due to many large scale crypto scams and crimes. Specifically, it was firms like QuadrigaCX and the Einstein Exchange, who were mishandling customer information and their funds, that stunted the process of crypto adoption in the country.
Now the stablecoin has a mission to restore trust and set a new industry standard for the Canadians. Stablecorp has vowed to keep Canadian dollar in equal numbers to QCAD to maintain balance and they will be publishing a monthly report to keep the public up to date
This QCAD wants to deliver transparent and effective services and get more people to trust the cryptocurrencies again.
Thi Stablecorp seems to share this attitude with the Bank of Canada, who just recently announced that they were considering launching a Central Bank Digital Currency (CBDC).
While there aren’t any specific plans in place, the Bank of Canada did share two scenarios where they would be willing to introduce a CDBC, mostly because they didn’t want to fall behind on the tech innovations. According to Tim Laine, Montreal’s Deputy Governor at a Fintech conference, the Bank has already started working on the prototype but only as a contingency.
The banks plan to launch the currency only if the strong need arises coming from the communities. The two scenarios where this would be necessary are if physical cash becomes less popular, is reduced or gets eliminated, or if the existing private cryptocurrencies start experiencing more and more pushback and problems, leading people to look for other alternatives, which the bank would provide if need be.
The primary concern of the Central bank is that they want to allow the private cryptocurrencies to do their job, but if the crypto crimes like the ones that damaged the reputation of these companies in the first place keep happening, in order to keep up with the rest of the world when it comes to financial innovation, they might have to make some extra adjustments and launch their own cryptocurrency.
The central bank claims that if they were to launch a cryptocurrency it would have the benefits of fiat currency, including the necessary safety measures, good store value, and privacy.