Canada’s first regulated stablecoin has officially launched and is ready to compete in a market dominated by U.S. players, says the head of the company behind the digital asset.
Tetra Digital Group announced the official launch of CADD on Monday. The company’s CEO, Didier Lavallée, says while growth has been phenomenal for stablecoins around the world, it has primarily benefited the U.S. market.
“We know, and obviously can observe that the Canadian dollar is widely used for global commerce,” says Lavallée.
“As more and more of that activity is moving into the digital sphere, we need a competitive offering as Canadians, and this coin will allow you to essentially do that.”
While other Canadian stablecoins exist, CADD is the first one issued by a licensed trust company under a traditional financial services framework approved by the Alberta Treasury Board and Finance.
It is also backed by established Canadian players like National Bank of Canada, Shopify, Wealthsimple, and ATB Financial.
How this benefits Canadian users
A fiat-backed stablecoin like CADD is a type of cryptocurrency designed to maintain a stable value relative to the Canadian dollar. Unlike traditional cryptocurrencies that experience high volatility, CADD is pegged 1:1 to the dollar, meaning one CADD is intended to be redeemable for exactly one Canadian dollar.
This specifically benefits users who may be using American stablecoins to purchase Canadian assets, and are bearing FX fees by doing so, says Lavallée.
“We do see operational expenses in terms of using U.S. dollars. So one is essentially better alignment with their business,” says Lavallée.
“As they do commerce or cross border activity they want to use their native currency…. as opposed to having to go to the U.S dollars just for the sake of using stablecoin rails,” says Lavallée.
No federal framework for stablecoins
There is no dedicated federal law specifically for stablecoins yet, and while the Stablecoin Act was passed two months ago, it won’t go into effect until 2027.
Until then, Lavallée says Tetra Digital Group believes it has the “right to distribute broadly at the federal level” until there is more clarity under the Stablecoin Act.
“We actually believe this is the best alignment that Canadians can get today. This is under the prudential framework by a regulated financial institution that’s been operating for five plus years in the Canadian market.
He says Tetra’s goal is to use its established reputation to eventually turn stablecoins as payment instruments as opposed to securities.
Base, Ethereum, Tempo
Lavallée says market dynamics always dictate which blockchain the company should adopt.
Currently he says the company uses Base for transactions because of its ability to handle large volumes.
He says Ethereum, the open source blockchain network, is “the book of record” at the institutional level and an obvious choice for big institutions.
The company is also working with payments-first blockchain Tempo to integrate CADD into workflows, and Lavallée says Solana will be the next natural expansion as its known for its extreme speed and is frequently used by global payment processors.
He says all of the company’s reserves are with Canadian financial institutions including tier one banks.
“We have hired essentially an external auditor, a financial auditor that’s going to be doing monthly audits,” says Lavallée. These will be published as attestations on their website so users can verify that for every 1 CADD token issued, there is exactly $1 held in reserve.
Beyond scheduled audits, there will be unannounced random checks to prevent any manipulation of funds, he says.
“And you know, the entire institution or vehicle is governed and controlled by a financial regulator as well,” says Lavallée.
He says Tetra has been performing similar high-level audits for over five years as a digital asset custodian.
“So we have a very long track record of doing so. And the controls will be the same. They will be fully transparent. And of course, being blockchain, individuals can go on it or sell themselves via, you know, blockchains and tools,” says Lavallée.
