Tetra Trust Company announced the official launch of CADD on May 02, Canada’s first ever regulated stablecoin backed 1:1 by Canadian dollars.
The fully regulated digital asset custodian company has received regulatory approval for the stablecoin through its agent CAD Digital Inc. from the Alberta Treasury Board and Finance.
This marks a national first for digital asset infrastructure in Canada by enabling Canadian dollars to move on blockchain rails under a financial services regulatory framework, according to the company’s official announcement.
CADD is issued by a licensed trust company, offering stability with the promise of trust reserves held in Canada.
“This milestone reflects the strong collaboration with Alberta’s government, industry partners, and regulators to bring a compliant and scalable Canadian-dollar stablecoin to market. CADD is issued by a regulated financial institution, with reserves held in Canada and compliance built in from day one”, Tetra Digital Group CEO Didier Lavallée said.
The Nature of Stablecoins
Stablecoins are seen as trading wallets – without the risks.
Pegged 1:1 to (usually) fiat currency, a stablecoin is a digital asset issued on a blockchain designed to provide stability in the crypto ecosystem. It serves as a reliable medium of crypto exchange, value storage, and settlement tool.
The digital asset’s utility lies in being the “safe haven” of the volatile trading market by having a stable value.
Traders do not usually use stablecoins in crypto markets as a profit source, but rather as a tool to trade other assets.
Regulated vs Decentralized
In the decentralized finance (DeFI) world, regulated stablecoins create a stark contrast: how can you have a regulated cryptocurrency if the crypto market itself is decentralized?
The answer lies in thecompliance pockets. Crypto is partially regulated, but not fully standardized or uniform across the globe.
Regulated stablecoins have regulatory acceptance because local governments view them as tools that enhance certain financial services. Compliance oversight comes in at the intersection points of the digital asset’s use in the real or fiat financial world.
Increasing Market Trend
Globally, stablecoins are becoming more and more in demand, with different market players integrating the asset as financial tools.
It’s used as a payment method and settlement medium, which pushes the need for regulation.
Wide acceptance of regulated stablecoins is prominent – highlighting its seat between decentralized and traditional finance.
