Coinsquare, a leading Canadian cryptocurrency exchange is preparing to launch a stablecoin backed by the Canadian dollar (CAD) reserves. Reportedly the investors will be able to purchase eCad valued at one dollar.
As per the announcement,
“For every one eCAD™ created, one Canadian dollar (CAD) will be held in reserve. As a result, Coinsquare is able to offer a transparent and reliable asset that global investors can use as a store and transfer of value and as an alternative to several USD-backed stablecoins.”
Designed to combine the stability of national currencies with the benefits of a digital currency, the stablecoins has the best of both worlds with ease of portability, faster transaction speeds, blockchain traceability. However, the market has often received them with mixed sentiments, especially the stablecoins pegged to the fiat.
The investors feat that without independent audits in place or regulations that mandate such audits, verifying that the said token is indeed fully backed by reserves is quite difficult. In saying so, a new report by cryptocurrency and blockchain advisor, George Samman implies that stablecoins are on a path to becoming new money.
Samman writes in his report titled the State of Stablecoins 2019: Hype vs. Reality in the Race for Stable, Global, Digital Money:
“Sixteen countries today face annual inflation rates of more than 20%, whereas other economies face hyperinflation – like Venezuela, where inflation hit 80,000% in 2018. In these situations, it is difficult (if not impossible) for people to save and protect their money, making it increasingly hard for these families to ever dig out of poverty. The world needs a stable, digital currency that gives people autonomy and control of their money globally.
Cryptocurrencies, like Bitcoin, were developed with the goal of fulfilling this global need. But the high volatility of today’s cryptocurrencies hinders their usefulness…
“Stablecoins and the tokenization of assets could solve many systemic, governmental and commercial challenges. The growth of this new industry has resulted in global regulatory bodies analyzing, and in most cases, supporting the development of regulation to encourage and foster the maximum value for their respective domiciles. The significant regulation developed over the last two years further helps legitimize and set the stage for creating a stable foundation for tokenization, stable-coins and asset-backed tokens to flourish. The states of Wyoming and Arizona is an example of this.”
As per the data compiled by CoinMarketCap, Coinsquare is the 88th largest crypto exchange in the world, moving $8.4 million worth of digital assets in the last 24 hours. Reportedly the exchange plans to offer the new stablecoin as an alternative to similar coins that are backed by the US dollar, such as Tether (USDT), TrueUSD (TUSD), Gemini Dollar (GUSD) and USD Coin (USDC).