Major Canadian cryptocurrency exchange Coinsquare has announced it will launch a new stablecoin backed by the Canadian Dollar (CAD) called eCAD.

It will allow investors to purchase eCAD on a one-to-one basis with CAD. For every one eCAD™ created, one CAD will be held in reserve.

“The launch of eCAD will create the first transparent, affordable, and secure way of transferring value in Canada and beyond, without the risk of instability in the traditional cryptocurrency market,” said CEO Cole Diamond.

Coinsquare said in a statement (Apr 4) that offering eCAD will allow the exchange to continue exploring how to optimize its financial services such as cross-border payments and remittance, peer-to-peer lending, merchant solutions, trade settlements, and FX conversions.

No mention was made as to a specific launch date for eCAD.

Some view stablecoins as a connection bridging cryptocurrencies and traditional currency investments by being pegged to fiat currency of traditional commodities like gold. The crypto community has, however, emphasized the importance of auditing stablecoin projects, since suspicions have been raised over time that some of these do not actually possess their requisite amount of backing reserves needed.

In 2018, US stablecoin Tether (USDT) was cast in doubt after it was subpoenaed by the US courts on suspicion that it did not have sufficient fiat US Dollars (USD) to back it. Last month, Tether came under further scrutiny after some noticed that it no longer claims to fully back its coin in only USD. Instead, USDT’s revised policy states that backing could include “other assets and receivables from loans made by Tether to third parties, which may include affiliated entities”.