Blockchain Venture welcomes draft Stablecoin Act

Executive Summary

• Blockchain Venture Capital Inc. (BVCI) welcomes the Bank of Canada's draft Stablecoin Act, stating its products (CADT and CUSD) are already designed to meet the proposed regulatory requirements, including bans on yield and strict reserve rules.
• The company announced the termination of its previously disclosed acquisition of Coin Shack, citing mutual agreement based on regulatory considerations and strategic priorities.
• BVCI indicated it may withdraw or continue its pending exemptive relief applications for CADT trading on major crypto platforms, depending on the final scope of the new federal stablecoin regulatory regime.

Key Details

• Regulatory Stance: BVCI supports the draft Stablecoin Act, which establishes a nationally supervised regime for fiat-backed stablecoins.
• Act Requirements: The draft includes a ban on yield/interest for stablecoin deposits, mandatory public redemption policies, strict reserve rules (held with qualified Canadian custodians), and confirmation that compliant stablecoins will not be treated as securities.
• Company Compliance: BVCI states CADT and CUSD have been built around transparency, qualified custody, one-to-one reserve backing, and AML/ATF standards over the past five years.
• Future Plans: BVCI intends to participate in the Bank of Canada's authorization regime once the act is approved by Parliament.
• Historical Context:
  • July 1, 2019: Launched CADT stablecoin in Toronto.
  • November 2019: Introduced CUSD stablecoin in Nevada.
  • July 2020: Issued CADT with support from Concentra Trust.
  • August 12, 2022: Listed on the Canadian Securities Exchange (CSE).
  • December 2023–2025: Submitted exemptive relief applications for CADT trading on major crypto platforms.
• M&A Update: The acquisition of Coin Shack has been terminated by mutual agreement. This decision reflects shared assessments of regulatory considerations and strategic priorities.
• Pending Applications: BVCI may consider withdrawing its exemptive relief applications depending on the final definition and scope of value-referenced crypto assets under the forthcoming Act.

Notable Quotes

• "BVCI welcomes the clarity and direction introduced in the Draft Stablecoin Act... From day one, CADT and CUSD have been built around the principles now being formalized by the Bank of Canada. We remain fully committed to meeting all criteria set out in the draft act..." — Richard Zhou, Founder and CEO
• "This framework represents a major step forward for compliant digital payments in Canada... We look forward to contributing our experience and technology to support the successful rollout of this national regime." — Richard Zhou