Blockchain Venture Capital Inc. Welcomes Draft of Bank of Canada's Stablecoin Act

Executive Summary

• Blockchain Venture Capital Inc. (BVCI) welcomes the Bank of Canada’s Draft Stablecoin Act, which would create a nationally supervised regime for fiat‑backed stablecoins in Canada.
• The draft legislation imposes strict reserve requirements, bans yield on stablecoin deposits, mandates publicly available redemption policies and qualified custodianship, and clarifies that compliant stablecoins will not be treated as securities.
• BVCI announced the termination of its previously disclosed acquisition of Coin Shack, citing regulatory considerations and strategic priorities.

Key Details

• Draft Stablecoin Act Highlights
• Ban on any yield or interest associated with fiat‑backed stablecoin deposits.
• Mandatory, publicly available redemption policies for holders.
• Reserve assets must be used solely for redemptions, be the reference currency or high‑quality liquid assets (HQLA), and be held with a qualified Canadian custodian.
• Compliant stablecoins will not be classified as securities under Canadian law.

• New authorization and oversight framework to be administered by the Bank of Canada.

• BVCI’s Commitment

• Reaffirms that CADT (CAD‑backed) and CUSD (USD‑backed) are fully transparent, 1:1 reserve‑backed, and designed to meet the draft requirements.

• Plans to apply for authorization under the Bank of Canada regime once the Act is enacted.

• Termination of Coin Shack Acquisition

• BVCI and Coin Shack mutually agreed not to proceed with the previously announced acquisition.

• Decision driven by regulatory considerations related to the emerging stablecoin framework and strategic alignment.

• Historical Context (brief)

• CADT launched July 1 2019; CUSD launched November 2019.
• Listed on the Canadian Securities Exchange in August 2022 (CSE: BVCI).
• Ongoing exemptive relief applications (Dec 2023‑2025) may be reconsidered based on final Act definitions.

Notable Quotes

• “BVCI welcomes the clarity and direction introduced in the Draft Stablecoin Act… We remain fully committed to meeting all criteria set out in the Draft Act, including the ban on yield, strict reserve rules, transparent redemption practices, and adherence to qualified custodian requirements.” – Richard Zhou, Founder & CEO, BVCI
• “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