Stablecorp, a Canadian financial technology company, has received $1.5 million in strategic growth capital in its pre-Series A funding round to develop VCAD, Canada’s first Canadian dollar (CAD)-backed Digital Deposit Receipt (DDR). DDR is a bank-issued deposit-based digital currency.
The capital came from new investors, Circle Ventures, Genesis and the Stellar Development Foundation (SDF); as well as existing partners such as Side Door Ventures, 3iQ and Borderless.
In February 2021, Stablecorp entered into a partnership with VersaBank, a Canadian Schedule 1 bank, to develop VCAD.
The fintech said it will deploy the capital to advance its vision of bridging the gap between legacy financial systems and the ‘on-chain’ financial framework of the future through the launch of VCAD which will be a multi-chain DDR.
VCAD will be issued through digital banking leader, VersaBank, and backed one-on-one by Canadian dollar deposits, the company explained.
“VCAD is expected to drive a ‘step change’ towards the blockchain-enabled future by facilitating secure and transparent payments , transfers and settlements in CAD-equivalent tokens, expanding FX options for companies and consumers around the world while introducing a new standard for volatility protection,” Stablecorp wrote in a statement.
‘A Strategic Funding’
Additionally, Stablecorp explained that the fund will enable it “to execute targeted near-term growth strategies in decentralized finance, yield generation, foreign exchange, payments, settlement , remittances, and digital asset trading.”
In the future, the firm intends to pursue global expansion into additional DDRs in partnership with VersaBank.
Reacting to the development, Alex McDougall, Stablecorp’s President and Chief Operating Officer, said the company was gratified that the investors share its vision for the central importance of DDRs as a bridge between fiat currencies and the digital financial framework of the future.
“With their involvement, we will continue to work toward a financial system in which the unique benefits of blockchain technology create value propositions that are simply better than traditional alternatives,” McDougall said.
Dante Disparte, Circle's Chief Strategy Officer and Head of Global Policy praised Stablecorp’s “cutting-edge blockchain technology capabilities,” adding that the fintech firm has established itself as a leading innovator in expanding on-chain financial infrastructure.
“As the issuer of USD Coin (USDC), one of the fastest growing dollar digital currencies, Circle is highly supportive of Stablecorp's mission of expanding the benefits of stable digital currencies to every market across the globe. Stablecorp has provided a powerful model of how this goal can be accomplished through its development of VCAD with VersaBank,” Disparte said.
On his part, Joshua Lim, the Managing Director and Head of Derivatives Trading at Genesis, noted that Stablecorp was charting a path for broader adoption of DDRs linked to the Canadian dollar.
Lim noted that the efforts will enable crypto lenders to serve significant cross-border markets with much greater efficiency, transparency, and speed.
“Stablecoins, and now Digital Deposit Receipts, have played a crucial role in the growth of digital asset lending around the world, enabling firms like Genesis to expand our offerings beyond shorting and hedging to much broader use cases across the lending and derivatives spectrum,” Lim added.
In a related development in the Canadian digital asset space, WonderFi Technologies last Monday announced its plan to acquire Coinberry, a regulated cryptocurrency exchange in Canada for $25.54 million. However, the acquisition is pending regulatory approval.
