The Topline
- National Bank of Canada is backing a stablecoin project that’s pegged to the loonie, backed one-to-one with national reserves
- This is the first of Canada’s Big Six banks to invest in a crypto coin, and has joined Shopify, Wealthsimple, ATB Financial, among others, in a $10 million funding round for Tetra Digital Group , which is developing the coin
- Launch is targeted for early 2026
It’s about Canada's financial sovereignty
Canada’s payment rails – those pesky, underlying systems and networks that facilitate the movement of funds between parties in business transactions – are stuck in the 1990s. These transfers crawl through layers of middlemen while the fees pile up. Businesses eat those costs or they pass them on to customers. It’s an expensive and inefficient system.
Stablecoins, by design, skip all that. They offer near-instant settlement with lower transaction costs. Imagine if Canadian exporters could settle with international suppliers in seconds rather than days, without the friction of foreign-exchange complexities. It gives Canadian businesses, and the national economy, a competitive edge at a critical time in global finance.
But here’s the thing – the global stablecoin market is almost entirely dominated by products based on the U.S. dollar. USDT and USDC together make up roughly 90 per cent of circulation , which is convenient, especially for Americans, but leaves Canada dependent on these products.
A homegrown, regulated Canadian stablecoin means businesses and potentially governments wouldn’t have to rely on U.S. products that are vulnerable to Washington regulators down the line. It makes sense to get ahead of that, especially in an era where Canada is trying to be more financial and economic independent.
The global financial order is shifting rapidly. A Canadian dollar stablecoin that’s issued under regulatory oversight and backed by domestically held reserves just makes sense.
So what?
Canada has spent decades defending its financial independence from U.S. overreach. A loonie-backed stablecoin is a natural extension of this fight – it keeps everything in-house. This ensures that Canada is in control of its own fortunes in case digital money reshapes international trade and finance.
National Bank seems to be betting that it will, and by investing now, it’s buying an insurance policy against obsolescence of the standard banking system.
Big risk, potentially small reward
Stablecoins are supposed to be safe, but history indicates otherwise. Stablecoins routinely break their pegs , freeze redemptions, or collapse entirely . So when Ottawa finally gets around to regulating stablecoins and digital assets generally – something its been dragging its feet on for years – things could get heavy.
Stablecoins hit an unholy trifecta of items that the Canadian government seems allergic to: crypto, privately issued money, and systemic financial risk. Yikes! Now that the Big Six bank is in the crypto game, there will be pressure to finally do something about it.
This could very well mean heavy-handed rules that make stablecoins either unprofitable or unworkable. National Bank may find itself holding equity in a company whose flagship product Ottawa treats like arsenic.
But that’s all beside the point anyway. Who’s even asking for this? Cross-border wire transfers may be slow, but nobody’s clamouring to swap loonies for blockchain tokens. Even if a loonie stablecoin gains traction domestically, its global relevance will barely register. The world trades in U.S. dollars (at least for the foreseeable future) and stablecoins are USD-dominated as well. It could be a hail mary inside Canadian borders, but globally it’ll register as a measly rounding error.
Meanwhile, Canadian consumers are frantic and angry about the rising costs of living, high interest rates, and predatory fees. Banks aren’t infinite pools of cash, so every dollar sunk into building a stablecoin is a dollar not spent improving mobile banking, upgrading cybersecurity, or I dunno, cutting exorbitant banking fees.
If Ottawa kneecaps the whole thing, National Bank looks reckless and naïve, and risks very serious reputational risk that could cause more harm than good.
So what?
National Bank is pouring millions into building a solution to a problem that, outside of a few fintech nerds, barely exists. Faster B2B payments sound good on paper, but in practice, companies already use established systems that work. And businesses won’t necessarily be in a position to take unnecessary risks in 2026.
