Versabank to introduce VCAD, Bank-issued, deposit-based digital currency
By Pavithra R
VersaBank, a technology-based and digital Canadian Schedule I chartered bank, has announced its plan to launch an encryption-based digital currency- VCAD, represented one-to-one by a Canadian dollar bank deposit with the Bank.
VCAD is expected to be the first digital currency to represent a fiat currency and the first digital currency issued by and backed by deposits with a North American bank.
The bank has also entered into a strategic partnership with Stablecorp, a joint venture between 3iQ, Canada’s leading crypto asset manager, and Mavennet, a Canadian leader in blockchain development, to launch VCAD commercially.
“As North America’s first bank-issued “stablecoin”, VCAD offers consumers and businesses the ability to adopt and leverage the benefits of digital currency and blockchain-based assets without the volatility of traditional currencies, alongside the security of a value-backed asset that the cryptocurrency world has long demanded. Consumers and businesses purchasing products and services with VCAD will finally know the precise value of their digital currency when executing these transactions,” said David Taylor, President of both VersaBank and its cybersecurity subsidiary, DRT Cyber.
VCAD is based on VersaBank’s proprietary banking software. Its digital currency issuance processes will be securely managed via VersaVault, VersaBank subsidiary, DRT Cyber’s leading digital bank vault designed to secure digital assets.
VCAD is to be issued by VersaBank to financial intermediary partners in exchange for Canadian dollar deposits with the Bank utilizing “smart contracts”. The bank’s partners will then offer VCAD directly to individuals and businesses, to use them for commerce and redeem them for Canadian dollars.
“We are thrilled to partner with VersaBank, a Schedule I Canadian bank, to offer a digital currency that addresses the two major shortcomings of the traditional cryptocurrency market – volatility and security. VCAD provides consumers with not only the security afforded by an underlying deposit with a Canadian chartered bank but also the comfort of knowing that each VCAD issued or redeemed will always have one-to-one value with the Canadian dollar. With such clear benefits, we are highly confident in the demand for VCAD as digital currencies increasingly become part of mainstream financial transactions,” said Jean Desgagne, CEO, Stablecorp.
The Bank is aiming public availability of VCAD in the coming months. Besides VCAD, under their collaboration, VersaBank and Stablecorp plan to work together towards the development and launch of “VUS” and “VEuro”, deposit-based, US dollar and Euro versions of the VersaBank digital currency.