All the liquidity tied up in stablecoins makes them absolutely critical to the health of the crypto market. VersaBank, based out of Canada, has an idea that could challenge the likes of Tether and USDC.  Covered: VersaBank Stablecoins Announcement The Future Of Stablecoins USDC v. VersaBank Stablecoin Stablecoins Announcement VersaBank, (NASDAQ: VBNK) announced “meaningful expansion” […] The post Large Canadian Bank Launches “Revolutionary” Alternative to Stablecoins appeared first on CryptosRus.

Large Canadian Bank Launches “Revolutionary” Alternative to Stablecoins

All the liquidity tied up in stablecoins makes them absolutely critical to the health of the crypto market. VersaBank, based out of Canada, has an idea that could challenge the likes of Tether and USDC. 

Covered:

  • VersaBank Stablecoins Announcement
  • The Future Of Stablecoins
  • USDC v. VersaBank Stablecoin

Stablecoins Announcement

VersaBank, (NASDAQ: VBNK) announced “meaningful expansion” to the scope of their stablecoin alternative, which has just completed rigorous testing. It is being dubbed as a revolutionary alternative to the stablecoin model we are all familiar with. They are called “Digital Deposit Receipts (“DDRs”).”

VersaBank is launching Canadian-dollar and US-dollar back versions of the asset.

According to the announcement by VersaBank, the DDR’s are “expected to be a superior, regulatory compliant alternative to current “stablecoins” for mainstream financial applications.” VersaBank is working with blockchain company Stablecorp to test VUSD and VCAD, the U.S. version and the Canadian version, respectively.

According to the press release, the stablecoin alternatives will be issued on Algorand and Ethereum, with testing for Stellar occurring as well. The Canadian version, VCAD, is set to launch this quarter, and with the testing complete, the launch may be imminent as all that is left is Versbank is finishing the audits.

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Speaking on the news, the CEO of VersaBank David Taylor said: “VersaBank’s DDRs are a natural extension of our existing digital deposit services that, when placed on a public blockchain and supported by the security of the Bank’s own VersaVault digital asset security technology, become a completely unique, game-changing, financial innovation.”

On what separates these DDR’s from stablecoins, Taylor went on to say that the calls for oversight and regulation into private stablecoins have prompted public companies like VersaBank to emerge victorious in the space, as they are a “Schedule I (Federal) Bank with an investment-grade rating.” Taylor mentioned they are the first mover in the space and aligned with the regulatory goals regarding stablecoins.

The Future Of Stablecoins

The President of Stablecorp highlighted the need for regulated entities like VersaBank in the stablecoin space saying: “Existing stablecoin models have run into significant challenges making headway into mainstream financial applications due to lack of transparency and regulatory oversight. DDRs are a “step-function” improvement over existing models.”

Because Tether has never been audited, they are under extreme scrutiny by regulators. This pall hanging over the space will be offset by emerging technologies like VersaBank’s regulated solution. VersaBank says their DDR’s (VUSD, VCAD) “are revolutionary highly-encrypted Digital Deposit Receipts (DDRs) with each DDR unit representing a one-dollar deposit with the Bank.”

Schedule 1 banks are fully audited and well-capitalized, so VersaBank claims there will be full transparency. VUSD and VCAD already minted on Stellar and Algorand. Some of the partners issuing VUSD are Trust Wallet, Loopring, Bitgo, and the aforementioned Algorand and Stellar.

USDC v. VersaBank Stablecoin

Sovereign nations like Canada are more inclined to go the route of VersaBank when formally issuing a digital dollar rather than going with a private company like Tether. Circle is also a competitor, with a 38 billion market cap. Circle (USDC) is also audited monthly by Grant Thornton LLP but these are “attestations” which are no more than snapshots of an account at any given time.

Moreover, USDC is “backed by one dollar or a dollar-denominated asset with equivalent value”, which means it’s not necessarily true that an actual dollar backs every USDC coin. Regardless, for interbank transfers, remittances, and/or a potential CBDC, a regulated entity like VersaBank leveraging an L1 can make immediate finality and instant settlement a reality–all with the security necessary to make fiat-pegged stable coins widely adopted.

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An HSBC report has hinted that security and regulation are paramount due to the importance of the capital moving on a stablecoin. In the report, the $3 trillion-dollar company criticized the risks inherent in stablecoins as they stand.

Touting the possibility of government-backed digital currencies, HSBC said: “fast cross-border payments and settlements features could “spur economic growth” and “fuel innovation across the financial sector”. Specifically, a near-instant payment capability could lower the price of issuing and trading bonds and other securities.”

In light of all this, it wouldn’t be a surprise if Versabank is the candidate for a future Canadian CBDC.

The post Large Canadian Bank Launches “Revolutionary” Alternative to Stablecoins appeared first on CryptosRus.