Canadian all-digital bank VersaBank said in an announcement on Wednesday that it plans to launch a digital currency called VCAD. According to reports, the digital currency will be backed by Canadian dollars deposited in the bank.

The Canadian bank claims that VCAD will actually be “the first digital currency representing legal tender” issued and supported by a North American bank. VersaBank said it has partnered with Canada Stablecorp, a joint venture of investment fund manager 3iQ and blockchain company Mavennet, to launch this “stable coin.”

The bank plans to issue VCAD to the public in the coming months by issuing this digital currency to its “financial intermediary partners” in exchange for Canadian dollar deposits. According to reports, these partners will be able to issue VCAD directly to individuals and other businesses.

Stablecorp CEO Jean Desgagne stated that the digital currency aims to solve “two major shortcomings of the traditional cryptocurrency market”, namely volatility and security. The bank also plans to develop digital currencies backed by U.S. dollars and euros issued by banks, called VUS and VEuro, respectively.

VersaBank is one of the few all-digital financial institutions where no physical bank branch can conduct transactions. In addition, its subsidiary has launched a digital safe for storing encrypted currencies.

Despite the lack of bank support, 3iQ and Mavennet have also launched regulated stablecoins linked to the Canadian dollar. Earlier this month, the two companies collaborated to launch an ERC-20 token called QCAD. According to data from Etherscan, more than 170,000 QCADs are already in circulation at a price of US$0.7854 (approximately US$133,000).

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In addition, VCAD is not the only stable currency pegged to the Canadian dollar in the Canadian market. Canadian cryptocurrency exchange Coinsquare currently supports eCAD and TrustToken’s TrueCAD (TCAD) stablecoins.

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