The Loon Effect: OSC Approval Signals a New Era for CAD Stablecoins

In the world of digital assets, the Canadian dollar has long played second fiddle to the US dollar. But a recent regulatory milestone for Calgary-based startup Loon suggests the tide may be turning for domestic digital settlements.

As BetaKit first reported, the Ontario Securities Commission (OSC) has issued a receipt for the final prospectus of Loon's CADC Reserve Trust. This move provides the exemptive relief necessary for Loon to issue its Canadian dollar-backed stablecoin, CADC, within Canada. Simultaneously, Paytrie—the firm that originally created CADC and from which Loon spun out last year—has been granted the relief required to distribute the token.

From a market perspective, the mechanism is straightforward: for every CADC token purchased, $1 CAD is deposited into a reserve trust account held with ATB Financial. While the concept of fiat-backed stablecoins is not new, the regulatory path to achieving this in Canada has been arduous. Kevin Zhang, CEO and co-founder of Loon (and co-founder of Paytrie), told BetaKit that the process involved "significant" legal spending and "18 to 24 months of intense back-and-forth" with regulators.

Zhang noted that the process began with the Alberta Securities Commission before the companies were redirected to the OSC. He further argued that the delay in passing Canada's Stablecoin Act created a "huge gap in the market," noting that had the law been in effect earlier, Loon would have sought approval directly from the Bank of Canada.

This is not an isolated effort to localize digital value. BetaKit reports that Toronto-based Stablecorp received similar approval last year for its QCAD token, and Calgary's Tetra Trust is pursuing its own CADD stablecoin via a different regulatory path. Notably, Paytrie is the second non-cryptocurrency trading platform to secure this relief as an "authorized participant," following US-based ZeroHash.

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**Analysis: Following the Money**

*Opinion: The significance of the OSC's nod to Loon is not merely the birth of another token, but the establishment of a repeatable distribution framework. Zhang explicitly told BetaKit that new stablecoin entrants should follow this exact model to ensure Canadians have the same seamless access they experience with USD-backed tokens like USDC.*

*The real prize here is the reduction of "exported value." By providing a regulated, CAD-backed alternative, Loon and its peers are targeting the friction inherent in using USD-backed alternatives for domestic transactions. While the Government of Canada's recently proposed stablecoin regulations—which Zhang described as a "positive step forward"—establish a level playing field rather than a domestic advantage, they provide the stability necessary for CADC to scale. Since its 2021 launch as an experiment by Paytrie, CADC has already facilitated over $1 billion CAD in transactions. With Loon now focusing exclusively on the token after launching last year with $3 million CAD, the goal is clear: move stablecoins out of the limiting confines of crypto exchanges and into broader cross-border and decentralized finance applications.*