Canadian-based digital bank, VersaBank has unveiled its plans to launch a stable digital currency dubbed the VCAD. Stablecoins are digital assets whose value does not change as much as other traditional virtual currencies such as Bitcoin (BTC), and Ethereum (ETH).
As contained in the press release shared by VersaBank, VCAD is a strong encryption-based digital currency (cryptocurrency) represented one-to-one by a Canadian dollar bank deposit with the financial institution. The stablecoin will be launched in partnership with Stablecorp, a joint venture between Canada’s leading crypto asset manager, 3iQ, and Mavennet, a Canadian leader in blockchain development.
VersaVault, a subsidiary of the Canadian bank will be tasked with the secure management of the issuance of VCAD. This innovation is described as the first of its kind from a deposit bank in North America.
“As North America’s first bank-issued “stablecoin”, VCAD offers consumers and businesses the ability to adopt and leverage the benefits of digital currency and blockchain-based assets without the volatility of traditional currencies, alongside the security of a value-backed asset that the cryptocurrency world has long demanded,” said David Taylor, President of both VersaBank and its cyber security subsidiary, DRT Cyber. “Consumers and businesses purchasing products and services with VCAD will finally know the precise value of their digital currency when executing these transactions.”
VersaBank noted that it will maintain business relationships with intermediaries, whom it will issue the directly minted tokens to. These middlemen will purchase the VCAD tokens with Canadian Dollars and will be able to distribute them upon request to users who can utilize the tokens for transactions. The stablecoins will also be redeemed at an equivalent amount with the Canadian Dollars.
VersaBank Planning Stablecoin Domination Ahead of Possible CBDC Rollout
Alongside its partner, Stablecorp, VersaBank appears motivated in its bid to permeate the Canadian payment ecosystem with its array of proposed stablecoins, ahead of any potential rollout of a government-issued Central Bank Digital Currency (CBDC).
A CBDC is a digital form of fiat money backed by and developed by a country’s apex monetary authority. The Bank of Canada has been reportedly exploring a CBDC for a while now, but private entities including VersaBank and Stablecorp appear to be working with a much swift timeline.
Based on its strategic partnership with Stablecorp, VersaBank hopes to roll out VUS, and VEuro. These are stablecoins that will be backed by the United States of America’s fiat currency, the Dollar, as well as the Euro from the European Union.
