Coinbase has announced plans to introduce a stablecoin tied to the Canadian dollar on its platform. This move follows shortly after the company received a license to operate in Canada. The exchange revealed on Twitter that it plans to add QCAD to its list of offerings. QCAD is a stablecoin pegged to the Canadian dollar, re-introduced last year by Canadian fintech firm Stablecorp.
Just like well-known stablecoins such as Tether (USDT) and USD Coin (USDC), QCAD is fully backed by reserves that are equal to or exceed the total number of issued tokens. Stablecorp has stated that these reserves consist of cash and cash equivalents. They provide monthly attestation reports to confirm the status of these reserves. The most recent report, from February 2024, indicated that there were 169,303.77 QCAD in circulation against CAD $200,903.17 in reserves. Although this amount is relatively modest compared to the more than $140 billion USD in tokens held by USDT and USDC combined, the listing could significantly enhance QCAD’s visibility and adoption.
Coinbase’s strategy is to list assets that adhere to its criteria for legality, compliance, and technical security, irrespective of the asset’s market capitalization or popularity. This approach could lead to a wider acceptance of QCAD, particularly given the recent regulatory clarifications provided by the Canadian Securities Administrators (CSA).
Following the high-profile collapses of FTX and Terra in 2022, the CSA has set stringent guidelines for stablecoins, including requirements for reserves to consist of highly liquid assets and to be managed by qualified custodians. Algorithmic stablecoins have been excluded under this new regulatory framework.
This guidance led to significant changes in the Canadian market, with Kraken and Coinbase ceasing to offer USDT and Wrapped Bitcoin (WBTC), and Binance withdrawing from the Canadian market entirely.
Last month, Coinbase was the first international crypto exchange to be registered as a “restricted dealer” in Canada, a testament to its compliance with Canadian regulations. The company has praised Canadian regulators for their collaborative approach, contrasting it with the more adversarial stance of U.S. regulators like the Securities and Exchange Commission (SEC), which is currently involved in legal actions against Coinbase and other exchanges.
Coinbase also noted its partnerships with Canadian banks, investment advisors, and pension funds, highlighting its commitment to supporting these institutions in navigating the digital asset landscape.
