Follow the Money Friday: Loon's Regulatory Win Signals New Era for CAD Stablecoins

The regulatory landscape for Canadian digital assets just shifted. In a move that signals the opening bell for a more efficient, CAD-backed stablecoin market, Calgary-based Loon has secured the necessary approval from domestic securities regulators to issue its CADC stablecoin, as BetaKit first reported.

According to BetaKit, the Ontario Securities Commission (OSC) has granted receipt for the final prospectus of Loon's newly established CADC Reserve Trust. This regulatory milestone allows the company to offer its blockchain-based token via exemptive relief. Additionally, Paytrie—the Calgary company from which Loon spun out last year—has also received exemptive relief to distribute CADC.

From a capital flow perspective, the structure is straightforward: for every CADC token purchased, $1 CAD is deposited into a reserve trust account held with ATB Financial. Loon CEO and co-founder Kevin Zhang told BetaKit that the process required "significant" legal investment and roughly 18 to 24 months of "intense back-and-forth" with regulators, starting with the Alberta Securities Commission before moving to the OSC.

**Opinion:** This isn't just a legal milestone; it's a structural play. By establishing a regulated, CAD-backed alternative, Loon is targeting the friction inherent in domestic cross-border settlements. For too long, Canadian users have exported value by relying on US dollar-backed alternatives. The ability to settle in CAD without the volatility of unpegged crypto or the overhead of USD conversion could fundamentally disrupt how value moves across borders for Canadian firms.

Zhang noted to BetaKit that the current capacity to deliver CADC will unlock a broader range of decentralized finance (DeFi) and cross-border use cases, arguing that relying on crypto exchanges for payments is "quite limiting."

Loon is not alone in this pursuit, though it is now part of a small group of regulated players. BetaKit reports that Toronto-based Stablecorp secured similar approval last year for its QCAD token, while Calgary's Tetra Trust is pursuing its own CADD stablecoin via a different regulatory path. Furthermore, Paytrie is now only the second non-cryptocurrency trading platform to secure this relief as an "authorized participant," following US-based ZeroHash.

The timing coincides with the Government of Canada's release of proposed stablecoin regulations. Zhang described these as a "positive step forward" that mirrors principles found in the U.S. GENIUS Act. However, Zhang told BetaKit that the delay in the Stablecoin Act becoming law "created a huge gap in the market," noting that had the law been in effect, Loon would have sought approval directly from the Bank of Canada.

While the federal draft rules establish a level playing field, Zhang told BetaKit he had hoped policymakers would go further to give CAD-backed stablecoins a competitive edge domestically and abroad.

To focus exclusively on CADC, which it acquired from Paytrie in 2025, Loon launched last year with $3 million CAD in funding. Since its 2021 debut as an experiment by Paytrie, CADC has already facilitated more than $1 billion CAD in transactions.