Calgary-based finance company Tetra Digital is preparing to launch a stablecoin in Canada.
Tetra Digital says it has raised $10 million to create a digital version of the Canadian dollar, with backing from Canadian companies Shopify (TSX: $SHOP), Wealthsimple, and National Bank (TSX: $NA).
Analysts say that a stablecoin from Tetra Digital would help Canada enter the era of digital money.
Stablecoins are cryptocurrencies whose value is tied to an underlying asset, typically a fiat currency such as the Canadian dollar or the price of gold.
Tetra Digital says that its Canadian dollar-backed stablecoin could be exchanged for an actual Canadian dollar at any time or place in the world without added fees or expenses.
Stablecoin advocates say the cryptocurrencies enable people to pay for online purchases and send money to family and friends without delays or costs.
Advocates also say that stablecoins lack the volatility seen in other digital assets such as Bitcoin (BTC) and Ethereum (ETH).
However, critics warn that stablecoins enable users to sidestep the banking system and lack the security that banks have in place to detect and stop illegal transactions.
Still, Canadian firms such as Tetra Digital are looking to launch a Canadian-dollar-backed stablecoin as other countries such as the U.S. and China dominate the space.
Stablecoins are separate from central bank digital currencies (CDBCs).
The Bank of Canada decided against launching its own digital currency last year, saying that it would instead focus on researching the digital asset space.
Tetra Digital is a private company and its stock does not trade on a public exchange.
