Coinbase Invests in Canadian Stablecoin Issuer
In a move aimed at expanding access to tokenized Canadian dollars, Coinbase has partnered with Canadian stablecoin issuer Stablecorp. This strategic investment, announced at the Blockchain Futurist Conference in Toronto, reflects Coinbase‘s commitment to bolstering Canada‘s digital asset ecosystem.
Coinbase Canada CEO, Lucas Matheson, confirmed the investment, stating that the exchange will be actively involved in marketing Stablecorp‘s fiat-collateralized stablecoin, QCAD. While the investment amount remains undisclosed, Matheson highlighted the significance of having a dedicated stablecoin for Canadians, especially in the absence of efficient peer-to-peer payment systems within the country.
“It’s really important that we have a stablecoin for Canadians,” Matheson said. “With stablecoins, 24/7, instant, borderless payments become possible — this is already feasible with existing tech.”
Matheson emphasized the urgency for stablecoin adoption in Canada, pointing to the high cost and slow processing times associated with traditional wire transfers. Stablecoins, he believes, offer a much-needed solution to streamline cross-border transactions and provide Canadians with a faster, more cost-effective payment option.
Navigating Regulatory Hurdles
Despite the potential benefits of stablecoins, their adoption in Canada faces regulatory barriers. As of May 13, stablecoins, primarily US dollar-backed USDT and USDC, have a combined market capitalization of around $245 billion, according to CoinGecko. However, Canada lacks a clear regulatory framework for stablecoins, specifically for those backed by fiat currencies.
In a March 26 blog post, Coinbase acknowledged this regulatory gap, stating that Canada needs to treat fiat-backed stablecoins as payment instruments rather than securities. This distinction is crucial as it would allow stablecoins to operate with greater flexibility and less stringent regulations.
The US Securities and Exchange Commission (SEC) recently clarified that stablecoins, if marketed solely as a means of making payments, do not qualify as securities in the United States. This precedent could influence Canada‘s regulatory approach, potentially paving the way for wider stablecoin adoption.
Coinbase Calls for National Strategy
Coinbase is urging the Canadian government to develop a comprehensive national strategy for digital assets, highlighting the strategic importance of cryptocurrencies in the country’s future. This call comes amidst a period of political transition, with Prime Minister Mark Carney assuming office in April.
While Carney has previously expressed skepticism towards cryptocurrencies, Coinbase remains hopeful that the new administration will recognize the potential of digital assets and foster a supportive regulatory environment. The investment in Stablecorp and the ongoing advocacy for clearer regulations demonstrate Coinbase‘s commitment to promoting the growth of the Canadian crypto ecosystem.
