Coinsquare to launch Canadian Dollar-backed ‘eCAD’ stablecoin

Coinsquare, a cryptocurrency exchange, will soon be launching a stablecoin pegged 1:1 to the Canadian dollar [CAD]. The exchange plans to use its new token ‘eCAD’ for cross-border payments and remittances, peer-to-peer lending, merchant payment solutions, trade settlements and Forex conversions, reported Business Wire.

The CEO of Coinsquare, Cole Diamond, made the announcement and stated,

“The launch of eCAD will create the first transparent, affordable, and secure way of transferring value in Canada and beyond, without the risk of instability in the traditional cryptocurrency market.”

The exchange promised that each eCAD will have one Canadian Dollar backing it in reserve. While claiming to keep the process transparent, the exchange however failed to provide details about how the proof of its reserves would be made public.

The announcement follows the exchange’s recent acquisition of decentralized exchange, [DEX] StellarX, which is based in Bermuda. StellarX is owned by Coinsquare and is its subsidiary. Coinsquare is backed by Canaccord Genuity, a financial services firm that raised $30 million in equity financing in early 2018. The exchange stated,

“Funding will be used to fuel a global growth plan and diversification strategy focused on making the platform even more responsive to mainstream customers’ needs.”

The exchange was recently declared to be a ‘low risk’ exchange by Coinfirm, a reg-tech startup. This was because the exchange had licenses and KYC [Know-your-customer]/anti-money laundering [AML] policies in place.

There have been a lot of stablecoins announced and launched recently. TrustToken launched a stablecoin that was pegged 1:1 to the British pound. However, the most widely used stablecoin is Tether [USDT], which also managed to land itself in trouble over its lack of independent audits of its reserves. A recent report highlighted that its collateral backing might not be 100% in US Dollars.

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