Cryptocurrency exchange Coinsquare is launching a stablecoin pegged 1:1 to the Canadian dollar (CAD).

The exchange plans potential roles for its new "eCAD" token in cross-border payments and remittance, peer-to-peer lending, merchant payment solutions, as well as trade settlements and forex conversions.

Coinsquare CEO Cole Diamond said in an announcement Thursday:

The firm pledged that each eCAD token will have one Canadian dollar backing it in reserve. While it claimed transparency in the announcement, it did not detail if and how proof of its reserves might be made public.

The news follows Coinsquare’s recent acquisition of decentralized exchange (DEX) StellarX for an undisclosed amount. StellarX is now a wholly owned subsidiary of Coinsquare and is based in Bermuda.

Coinsquare is backed by financial services firm Canaccord Genuity, having raised $30 million in equity financing back in early 2018. The funding, the exchange said at the time, “will be used to fuel a global growth plan and diversification strategy focused on making the platform even more responsive to mainstream customers’ needs."

The platform was recently identified as a "low risk" exchange by reg-tech startup Coinfirm, due to having licenses and strict know-your-customer (KYC)/anti-money laundering (AML) policies in place.

The launch comes amid something of a flood of stablecoin launches over the last year. Most recently, cryptocurrency startup TrustToken launched a stablecoin pegged 1:1 to the British pound and crypto exchange Bittrex, along with five other blockchain firms, announced a euro-pegged stablecoin that can be staked to earn returns.

The oldest and still the most used stablecoin, tether (USDT), which has been controversial for its lack of independent audits of its reserves, recently announced that its collateral backing the token may not be 100 percent in U.S. dollars.

Canadian dollars image via Shutterstock