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A Canadian bank announced on Feb. 24 that it will launch a cryptocurrency backed by the Canadian dollar called “VCAD.” VCAD is a “stablecoin,” an emerging class of digital coins that attempt to achieve price stability and are backed by a reserve asset.

VersaBank, a Canadian financial institution based in London, Ontario, will issue VCAD to a third party, Stablecorp (a joint venture between Canadian companies 3iQ Corp., a crypto asset manager, and Mavenet, a blockchain development firm) in exchange for Canadian dollar deposits. The transactions will be executed using smart contracts. Stablecorp will then distribute the VCAD to businesses and individuals for use in general commerce in the coming months, VersaBank said.

VCAD will be the first digital currency to be backed by deposits with a North American bank. VersaBank also plans to work together to launch “VUS,” a deposit-based U.S. dollar version of the VersaBank digital currency, and “VEuro” for the euro.


VersaBank’s move is, by the bank’s own admission, an attempt to increase the size of its deposit base so that it can expand its lending operations. Other banks, notably JP Morgan Chase in the U.S., are also actively looking to issue stablecoins, though the JPM Coin is at this time intended to be used solely to settle transactions between bank customers rather than circulating for use in general commerce. A threshold issue for any U.S. stablecoin will be whether it is a security—a question that will require careful analysis, as FinHub was quick to point out in the wake of the OCC’s interpretative letter on the authority of national banks and federal savings associations to hold stablecoin reserves.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm or its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.


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Anthony Tu-Sekine | Partner

As the head of Seward & Kissel’s Blockchain and Cryptocurrency Group and a frequent commentator on all things crypto, Anthony advises clients on a wide range of evolving topics, including how to structure and issue security and utility tokens, registered and unregistered offerings of security tokenstoken custody, transfer and liquidity issues, non-security opinions, and investments in crypto assets by funds and other investors. A recognized leader on physical precious metals funds, Anthony represented APMEX Inc. and alternative asset manager Sprott Inc. in connection with the launch of OneGold.com, which allows investors to own gold documented on blockchain.

“You can work with regulators or you can really try to piss them off… If you really want to do the latter, then you should expect that they will bring every tool they have against you.” 

Anthony’s thoughts on BitMEX indictment, as published in Law360 article “BitMEX Case Seen as Blessing in Disguise for Crypto Sector” 



Casey Jennings | Associate

A member of Seward & Kissel’s Financial Services Regulatory Group and Blockchain and Cryptocurrency Group, Casey advises financial services companies – including banks, broker-dealers, investment funds, service providers, and financial technology companies – on federal and state banking and securities law issues and the structuring of new financial products, including anti-money laundering, deposit issues, token offerings, custody of traditional and crypto assets, transfer and liquidity issues, Volcker Rule issues, and investments in crypto assets by funds and other investors. Before joining the firm, Casey served as counsel to the Consumer Financial Protection Bureau, where he developed and implemented financial regulatory policy, including the first CFPB rulemaking to rely on unfair, deceptive, and abusive acts and practices (UDAAPs) authority. Since then, he has:

  • Represented e-retailer APMEX Inc. and alternative asset manager Sprott Inc. in connection with the launch of the online marketplace, OneGold.com.

“The whole notion of crypto is that there are no gatekeepers and the BSA requires that there be gatekeepers. Those two notions are very much at odds with one another. But the BSA is the best system that we’ve got right now.”

Casey’s perspective on crypto AML regulations as published in Cointelegraph article “How U.S. authorities are using old AML tools to crack down on crypto”