The OSC Signal: Why Loon's Regulatory Win is the Real Catalyst for CAD Stablecoins

For years, the conversation around Canadian dollar-backed stablecoins has been one of theoretical utility. The industry has long sought a way to reduce the value exported to U.S. dollar-backed alternatives and alleviate friction for domestic users. However, the recent move by the Ontario Securities Commission (OSC) to grant exemptive relief to Loon is the specific mechanism that shifts this from a concept to a capital flow.

As BetaKit first reported, the Calgary-based startup Loon has received a receipt for its final prospectus for the CADC Reserve Trust. This regulatory nod allows Loon to issue its CADC stablecoin in Canada, while also granting exemptive relief to Paytrie—the company from which Loon spun out last year—to distribute the token.

From a markets perspective, the numbers tell the story of the demand. Paytrie originally developed CADC as an experiment in 2021, and since then, the stablecoin has facilitated more than $1 billion CAD in transactions. Loon, which launched last year with $3 million CAD to focus exclusively on the asset it acquired from Paytrie in 2025, is now positioned to scale this liquidity within a regulated framework.

***Opinion:*** *The significance here isn't just the token itself, but the blueprint. In an interview with BetaKit, Loon CEO Kevin Zhang stated that any new company looking to issue a Canadian dollar stablecoin should follow this exact path to ensure users have the same seamless access they expect from assets like USDC. By establishing this framework, Loon is effectively building the rails for institutional CAD liquidity.*

The operational mechanism is straightforward: for every CADC token purchased, $1 CAD is deposited into a reserve trust account held with ATB Financial. This structure provides the stability required for institutional adoption, moving the asset away from the volatility associated with other digital currencies.

However, the path to this point was costly and prolonged. Zhang told BetaKit that the process involved "significant" legal investments and "18 to 24 months of intense back-and-forth" with regulators. The process began with the Alberta Securities Commission before shifting to the OSC. Zhang noted that the delay in passing Canada's Stablecoin Act created a "huge gap in the market," suggesting that had the law been in effect, Loon would have sought approval directly from the Bank of Canada.

Loon is not alone in this space, but it is part of a small group of first-movers. BetaKit notes that Toronto-based Stablecorp received similar approval last year for its QCAD token, and Calgary's Tetra Trust is pursuing its own CADD stablecoin. Furthermore, Paytrie is now only the second non-cryptocurrency trading platform to secure the necessary relief to offer stablecoins in Canada, following U.S.-based ZeroHash.

While the Government of Canada recently released proposed stablecoin regulations—which Zhang described to BetaKit as a "positive step forward" mirroring principles of the U.S. GENIUS Act—the current rules do not provide a specific regulatory advantage for CAD-backed tokens over USD versions. Instead, they create a level playing field. For the market to truly shift, Zhang suggested that policymakers may need to push legislation further to help domestic stablecoins compete globally.

Regardless, the OSC's approval removes the primary regulatory bottleneck, transitioning CADC from a limited experiment into a tool for broader cross-border and decentralized finance use-cases.