Learn more about QCAD from these frequently asked questions.

What is Digital Money?

A “digital money” is a type of virtual currency that is designed to have a stable price, generally with respect to a fiat currency (e.g., United States or Canadian Dollar). There are many methods to create this price stability, but the leading digital money maintain at least a 1:1 reserve of traditional, low risk cash or cash equivalents. According to the International Monetary Fund, the strength of digital money is their attractiveness as a means of payment. Low costs, global reach and speed are all potential benefits of digital money. Moreover, digital money allow low-cost blockchain-based payments and can be embedded directly into digital applications, thereby creating machine speed webs of commerce. According to the United States Federal Reserve, digital money was designed specifically to overcome the substantial volatility exhibited by first-generation cryptocurrencies, which limited their reach in payments and their utility as a unit of account. Digital money also differ from the initial set of cryptocurrencies in that they may be issued by a central entity and rely on third-party institutions for some aspects. Our QCAD digital money is reserved 1:1 with cash and cash equivalents held with a qualified custodian in Canada, Tetra Trust Company. Tetra Trust Company holds QCAD reserves in a segregated “In Trust For” account with Canadian financial institutions. QCAD is available for purchase and sale by a small number of companies, consisting of investment dealers, regulated crypto asset trading platforms and other regulated large-volume (i.e., wholesale) entities (“Authorized Dealers”).

How does QCAD work? How do you maintain stability?

All digital money aim for stability, but the mechanisms by which they do so aren't the same. QCAD is stable with respect to a fiat currency (i.e., the Canadian Dollar), and this stability mechanism stems primarily from having Authorized Dealers who can buy and sell 1 QCAD for 1 Canadian dollar (“1 CAD”) from Stablecorp Digital Currencies Inc.(“Stablecorp”). This ability to buy and sell 1 QCAD from Stablecorp for 1 CAD is meant to ensure that, if the market price of QCAD ever differs from 1 CAD, there will be an arbitrage opportunity that will return the price to 1 CAD. To bolster reliance and faith that Authorized Dealers will always be able to buy and sell 1 QCAD for 1 CAD, Stablecorp also provides monthly attestations of QCAD reserves, as well as an annual audit. Further, Stablecorp has extensive compliance and governance infrastructure that are designed to ensure that QCAD is always backed 1:1 (or more) with cash or cash equivalent assets held with our custodian. It is important to note that QCAD are not designed to be stable with respect to any other currency, and it's important to note that the Canadian Dollar has a floating exchange rate, and its value varies over time.

What is QCAD for?

QCAD is a multi-chain asset available on the Ethereum, Algorand and Stellar blockchains that can be used as a method of payment or to facilitate the trading, borrowing and lending of other crypto assets. Other associated uses of QCAD include:

1. as an on-chain FX solution through digital money-to-digital money trading with specific connectivity to the Circle and USDC ecosystems;

2. as an inter- and intra-Canada transfer / payment rail that is uniquely affordable and fast; and

3. as an instant CAD-denominated bridge asset between crypto assets and fiat

QCAD enjoys the full benefits of enabling seamless settlement and full traceability. All transactions are securely recorded and immutable, transparent and auditable.

Where can I buy QCAD?

QCAD tokens are available for sale through what we term "Authorized Dealers", which are companies that have passed our stringent client onboarding and AML/KYC checks and have the right to buy and sell large quantities of QCAD.

Does QCAD represent a direct claim on the underlying fiat reserves?

No, the fiat reserves allow Stablecorp to always be able to repurchase all existing QCAD for $1 from Authorized Dealers, which provides the backstop for the value of QCAD. However, the QCAD token itself does not represent a direct claim on the underlying fiat asset. In other words, QCAD holders who are not Authorized Dealers have no entitlement to the underlying fiat reserves of QCAD.

How are the fiat reserves held?

The fiat reserves are held with our custodian, Tetra Trust Company. Tetra Trust Company holds QCAD reserves in a segregated “In Trust For” account with Canadian financial institutions. These fiat reserves are segregated from all other assets of Stablecorp, and Stablecorp itself only exists to operate QCAD and manage these fiat reserves.

Can an Authorized Dealer buy QCAD in any other currency or digital money?

Yes, QCAD can be bought using USD or USDC. However, all proceeds are converted into CAD fiat before being stored as a reserve with our custodian. All fiat reserves backing QCAD are held in CAD.

Does QCAD pay interest?


How much do you charge?

There is no fee to send or receive QCAD, other than the public blockchain network fee. This fee is paid to the network, and we do not get a cut of these transaction fees.

How can my company become an Authorized Dealer?

We only accept Authorized Dealer applicants who have passed our stringent client onboarding and AML/KYC checks. If you would like to discuss the process, please email info@stablecorp.ca to find out more.

What are the Risks Associated with Holding and Using Digital Assets?
Short History Risk

Blockchain networks, tokens and digital assets are a new technological innovation with a limited history. Due to this short history, it is not clear how all elements of digital assets will unfold over time. There is no assurance that usage of digital assets and blockchains will continue to grow. The digital assets community has successfully navigated a considerable number of technical and political challenges since its inception, and this leads Stablecorp Digital Currencies Inc. (“SDC”) to believe that the community will continue to work through future challenges. The history of open-source software development would indicate that digital asset communities are able to change the software under development at a pace sufficient to stay relevant. The continuation of such communities is not guaranteed, and insufficient software development or any other unforeseen challenges that the community is not able to navigate could have an adverse impact on the future of QCAD. A contraction in use of digital assets may result in decreased security on public blockchain networks.

Potential Decrease in Global Demand for Digital Assets

As a currency, digital assets serve as a means of exchange, store of value, and unit of account. Many people using digital assets as money-over-internet-protocol do so with it as an international means of exchange. Speculators and investors using digital assets as a store of value then layer on top of means of exchange users, creating further demand. If consumers stop using digital assets as a means of exchange, or its adoption therein slows, then usage and security of public blockchain networks may suffer, adversely impacting QCAD.

Buyers of QCAD should be aware that there is no assurance that digital assets will maintain its long-term value in terms of purchasing power in the future or that the acceptance of digital assets for payments by mainstream retail merchants and commercial businesses will continue to grow. As relatively new products and technologies, digital assets have yet to become widely accepted as a means of payment for goods and services by many major retail and commercial outlets, and use of digital assets by consumers to pay such retail and commercial outlets remains limited. Banks and other established financial institutions may refuse to process funds for digital asset-based transactions, process wire transfers to or from crypto asset trading platforms(“CTPs”), digital asset-related companies or service providers, or maintain accounts for persons or entities transacting in digital assets. Conversely, a significant portion of digital assets demand is generated by speculators and investors seeking to profit from the short or long-term holding of digital assets. SDC believes that, like any commodity, digital assets will fluctuate in value, but over time will gain a level of acceptance as a store of value, medium of exchange or token of utility.

Financial Institutions may Refuse to Support Transactions Involving Digital Assets

In the evolving regulatory climate for digital assets, Canadian regulated financial institutions may cease to support transactions involving digital assets, including the receipt of cash proceeds from sales of digital asset. Banks and other established financial institutions may refuse to process funds for digital asset transactions, process wire transfers to or from CTPs, digital asset-related companies or service providers, or maintain accounts for persons or entities transacting in digital assets. While SDC makes best efforts to maintain significant redundancy, should this occur, SDC could be unable to pay out redemption proceeds within reasonable timeframes.

Uncertain Regulatory Framework

The regulation of digital assets continues to evolve in North America and within foreign jurisdictions, which may impact the demand and availability of digital assets. The regulatory environment is evolving and changes to it may adversely affect QCAD. Due to digital assets’ short history, and its emergence as a new asset class, regulation of digital assets is still a work in progress. For example, in the United States the Commodity Futures Trading Commission has ruled digital assets are a commodity, while the IRS has ruled the digital assets are a property. The U.S. Securities and Exchange Commission and the Canadian Securities Administrators (“CSA”)generally take the view that bitcoin and other sufficiently decentralized cryptocurrencies are commodities; however, they have not made a formal statement regarding their classification. The CSA have also suggested in CSA Staff Notice 21-332 Crypto Asset Trading Platforms: Pre-Registration Undertakings– Changes to Enhance Canadian Investor Protection that Value Referenced Crypto Assets may be considered securities and that, in order for regulated CTPs in Canada to provide access to them, the VRCA must meet certain prudential requirements (including requirements relating to fiat reserves, monthly attestations, the use of a qualified custodian, etc.). SDC believes that the digital assets regulatory situation will continue to evolve to allow for innovation while also protecting consumers. Notwithstanding the foregoing, to the extent digital assets, in particular digital money, are determined by a regulatory authority to be a security or a derivative, QCAD may be adversely affected.

Loss of "Private Keys"

The loss or destruction of “private keys” (numerical codes required by users to access their digital assets) could prevent a user from accessing its digital assets. Loss of these private keys may be irreversible and could result in the loss of all or substantially all the digital assets held by the user. This risk may be mitigated by the services provided by a custodian to maintain the safety of a user’s private keys.

What are the Risks Associated with Blockchain Networks?
Dependence on Network Developers

While many contributors to a blockchain network’s open-source software are employed by companies in the industry, most of them are not directly compensated for helping to maintain the protocol. As a result, there are no contracts or guarantees that they will continue to contribute to a blockchain network’s software.

Issues with the Cryptography Underlying the Network

For even the most established digital asset networks, the network and other cryptographic and algorithmic protocols governing the issuance of digital assets represent a new and rapidly evolving industry that is subject to a variety of factors that are difficult to evaluate. In the past, flaws in the source code for digital assets have been exposed and exploited, including flaws that disabled some functionality for users, exposed users’ personal information and/or resulted in the theft of users’ digital assets. The cryptography underlying digital assets could prove to be flawed or ineffective, or developments in mathematics and/or technology, including advances in digital computing, algebraic geometry and quantum computing, could result in such cryptography becoming ineffective. In any of these circumstances, a malicious actor may be able to take digital assets from users, which could adversely affect public confidence in digital assets generally. Moreover, functionality of a blockchain network may be negatively affected such that it is no longer attractive to users, thereby dampening demand for digital assets. Any reduction in confidence in the source code or cryptography underlying digital assets generally could negatively affect the demand for digital assets and therefore adversely affect QCAD.

Disputes on the Development of a Network may lead to Delays in the Development of the Network  

There can be disputes between contributors on the best paths forward in building and maintaining a blockchain network’s software. Furthermore, the miners supporting the network and companies using it can disagree with the contributors as well, creating greater debate. The blockchain community often iterates slowly upon contentious protocol issues, which many perceive as prudently conservative, while others worry that it inhibits innovation.

Significant Increase in Digital Assets on a Network Could Affect the Ability of the Network to Accommodate Demand

One of the most contentious issues within the blockchain community has been around how to scale a network as user demand continues to rise. The debate goes back to the earliest days of digital assets. There are many possible solutions, and most of them boil down to different ideologies on how digital assets should be used. However, it will be important for the community to continue to develop at a pace that meets the demand for transacting in digital assets, otherwise users may become frustrated and lose faith in the network. For a decentralized network, strong consensus and unity is particularly important to respond to potential growth and scalability challenges.

A Blockchain may Temporarily or Permanently Fork and/or Split

Most blockchain network’s software and protocol are open source. When a modification is released by the developers and a substantial majority of miners consent to the modification, the change is implemented, and the network continues uninterrupted. However, if a change were activated with less than a substantial majority consenting to the proposed modification, and the modification is not compatible with the software prior to its modification, the consequence would be what is known as a “hard fork” (i.e., a split) of the network (and the blockchain). One blockchain would be maintained by the pre-modified software and the other by the post-modification software. The effect is that both blockchain algorithms would be running parallel to one another, but each would be building an independent blockchain with independent native assets.

For example, following long-term debate on how to scale the Bitcoin Network’s transaction capacity, on August 1, 2017, the digital currency forked into Bitcoin Classic (BTC) and Bitcoin Cash (BCH). On October 24, 2017, bitcoin further forked to create Bitcoin Gold (BTG). Bitcoin Classic, Bitcoin Cash, and Bitcoin Gold continue to exist today, and though their combined value exceeds the value of the Bitcoin Network prior to the fork, future forking events could prove substantially more detrimental to the value of the Bitcoin Network.  

Although forks are likely to be addressed by a community-led effort to merge the two groups, such a fork could adversely affect digital assets’ viability, which could in turn adversely affect QCAD.

Dependence on the Internet

Users and developers access blockchains via the internet. Digital assets miners relay transactions to one another via the internet, and when blocks are mined, they are also forwarded via the internet. Thus, blockchain networks are dependent upon the continued functioning of the internet.

Risk if Entity Gains a 51% Share of a Network

Depending on the governance structure of a blockchain, in some cases, if an entity gains control of over 51% of the compute power (hash rate), the entity could use its majority share to double spend digital assets. Essentially, the entity would send digital assets to one recipient, which is confirmed in the existing blockchain, while also creating a shadow blockchain that sends those same digital assets to another entity under its control. After a period of time, the entity will release its hidden blockchain and reverse previously confirmed transactions, and due to the way mining works, that new blockchain will become the record of truth. This would significantly erode trust in that blockchain network to store value and serve as a means of exchange, which may significantly decrease the value of the digital assets.

Possible Changes in Transaction Fees  

Digital asset miners, functioning in their transaction confirmation capacity, collect fees for confirming blocks. Miners confirm transactions by adding previously unconfirmed transactions to new blocks in the blockchain. Miners are not forced to confirm any specific transaction, but they are economically incentivized to confirm valid transactions as a means of collecting fees. Miners have historically accepted relatively low transaction confirmation fees because miners have very low marginal cost of validating unconfirmed transactions. If miners collude in an anticompetitive manner to reject low transaction fees, then digital assets users could be forced to pay higher fees, thus reducing the attractiveness of a blockchain network. Digital asset mining occurs globally, and it may be difficult for authorities to apply antitrust regulations across multiple jurisdictions. Any collusion among miners to attempt an attack on a blockchain network may adversely impact the trust in the network and the security of digital assets on that network.

Attacks on the Network  

Blockchain networks are periodically subject to distributed denial of service attacks to clog the list of transactions being tabulated by miners, which can slow the confirmation of authentic transactions. Another avenue of attack would be if a large number of miners were taken offline, as it could take some time before the difficulty of the mining process algorithmically adjusts, which would stall block creation time and therefore transaction confirmation time. Thus far these scenarios have not plagued networks for long or in a systemic manner.

Decrease in Block Reward  

In the event of a material decrease in the block reward to a blockchain network, miners may cease to provide their computational power to the consensus mechanism for the network’s blockchain.  

Significant Energy Consumption to run Blockchain Networks

Because of the significant computing power required to mine digital assets, blockchain network’s energy consumption as a whole may ultimately be deemed to be or indeed become unsustainable (barring improvements in efficiency which could be designed for the protocol). This could pose a risk to broader and sustained acceptance of blockchain networks as a peer-to-peer transactional platform.

What are the Risks Associated with Digital Money?
Risk of QCAD Losing its Peg

QCAD tokens are sold to and purchased from a small number of companies, consisting of investment dealers, regulated CTPs and other regulated large-volume (i.e., wholesale) entities (“Authorized Dealers”). When an Authorized Dealer purchases a QCAD from SDC, SDC will mint a QCAD, and it will always do so at a rate of 1 QCAD per one Canadian dollar (“1 CAD”).When an Authorized Dealer sells its QCAD for fiat currency, SDC will always repurchase such QCAD at a rate of 1 CAD per 1 QCAD.

For each QCAD that is issued by SDC and remains in circulation, QCAD will maintain at least the equivalent of Canadian denominated assets in segregated accounts with its custodian. However, SDC does not guarantee that the value of 1 QCAD will always equal 1 CAD across all platforms. Due to a variety of factors outside of SDC’s control, the value of QCAD, particularly on third-party platforms such as CTPs, can fluctuate above or below 1 CAD. SDC cannot control how third parties value QCAD, and SDC is not responsible for any losses or other issues that may result from fluctuations in the value of QCAD.

“Run” Risk or Redemption Risk

The failure of QCAD to perform according to expectations (i.e., by allowing Authorized Dealers to have 1 QCAD repurchased in exchange for 1 CAD) would harm QCAD holders and could pose systemic risk. The mere prospect of QCAD not performing as expected could result in a “run”– i.e., a self-reinforcing cycle of redemptions and sales of reserve assets. SDC addresses run risk by ensuring that it maintains a reserve of highly liquid assets with a market value at least equal to the value of outstanding QCAD. The QCAD reserve is subject to monthly attestations and an annual audit in order to confirm that the QCAD reserve holds sufficient assets to satisfy a repurchase by Authorized Dealers of all QCAD at any given moment. However, no assurance can be given that QCAD will perform as expected, and QCAD may fail to perform as expected for reasons outside the control of SDC (for example, because of the failure of a blockchain network as described in “Third-party Platform Risk” below).

Management Risk and Custodianship Risk

The holding of reserves by SDC with a third-party custodian may expose QCAD and its holders to certain risks relating to the management and custodying of QCAD reserves, such as fraud risk or proficiency risk. QCAD holders may also face risk in permitting SDC to have access to reserves that are held with Tetra Trust Company insofar as assets could be accessed improperly and misused. SDC addresses management risk by maintaining effective and stringent governance practices. SDC addresses custodianship risk by ensuring that: (i) the reserve of assets is held by a qualified custodian; and (ii) reserve assets are segregated from assets of SDC and its affiliates. QCAD’s reserves are kept with Tetra Trust Company, which is qualified to act as a custodian under National Instrument 31-103 Registration Requirements, Exemptions, and Ongoing Registrant Obligations and National Instrument 81-102 Investment Funds. Tetra Trust Company holds QCAD reserves in a segregated “In Trust For” account with Canadian financial institutions. However, there can be no assurance that such controls will prove to be effective in all circumstances.

Risk of Other Digital Money Losing Their Peg

The stability of a fiat-backed digital money results from the underlying assets backing the digital money, which are held by the digital money’s issuer in segregated or omnibus accounts, and the ability of a holder to redeem the digital money from its issuer for underlying collateral. The issuers of certain digital money, particularly in foreign jurisdictions, retain broad discretion to determine the composition and amounts of assets held in the issuers’ accounts backing those digital money, and to substitute assets other than the fiat currency that is initially deposited.

As a result of the discretion afforded to certain digital money issuers to determine the composition and amounts of assets held in the issuers’ accounts backing those digital money, there is a risk that an issuer may be unable to liquidate enough backing assets if it were to face mass redemptions of its digital money, which could cause the price of the digital money to deviate from the price of the underlying fiat currency or other asset that it is designed to track. If a digital money issuer were to fail to honor its redemption obligations, this could undermine public confidence in digital money and in digital assets more broadly, which could have a widespread impact on the crypto asset economy, causing the prices of other digital money, such as QCAD, to become more volatile.

Third-party Platform Risk

QCAD is based on open-source software and is currently available on the Ethereum, Algorand and Stellar blockchains (the “Permitted Blockchains”). The Permitted Blockchains may experience issues (such as hacks, outages, etc.) which may impact a QCAD holders’ ability to spend, transfer or redeem their QCAD. SDC is not responsible for any losses or other issues that QCAD holders might encounter while using QCAD on any of the Permitted Blockchains. QCAD holders accept all consequences of using QCAD on the Permitted Blockchains.

QCAD transactions are not reversible. Once a QCAD holder sends QCAD to an address, QCAD holders accept the risk that they may lose access to, and any claim on, that QCAD indefinitely or permanently. An improper transfer (whereby QCAD is sent to the wrong recipient), whether accidental or resulting from theft, can only be undone by the receiver of the QCAD agreeing to send the QCAD back to the original sender in a separate subsequent transaction. To the extent a user erroneously transfers, whether accidental or otherwise, QCAD in incorrect amounts or to the wrong recipients, the user may be unable to recover the QCAD.

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