Loon raises CAD $3M to expand Canadian dollar stablecoin

Loon has raised CAD $3 million in pre-seed financing to develop a Canadian-dollar-backed stablecoin and will assume responsibility as the issuer of the existing CADC stablecoin.

The Calgary-based company obtained support for its financing round from Version One Ventures, Garage Capital, and a group of Canadian angel investors. The funding will be used to advance product development, increase recruitment for engineering and compliance roles, and bolster a national regulatory strategy for the stablecoin.

With its acquisition of CADC, Loon will seek to provide a Canadian alternative to the US dollar stablecoins, which currently dominate the local digital-asset market. Originally launched by Paytrie in 2021 the CADC stablecoin has grown to be responsible for more than CAD $200 million in transaction volume.

Loon emphasised that its mission is to construct a robust, transparent Canadian payment infrastructure tailored for the digital economy. The company pointed to the current reliance on foreign stablecoins as a hindrance to domestic users and as a driver of value out of the country.

"Canada is at a crossroads," said Kevin Zhang, CEO of Loon. "We can either remain dependent on foreign financial infrastructure or build our own sovereign rails for the digital era. By providing a regulated, trusted digital Canadian dollar, we're unlocking the next generation of innovation, from payments to capital markets."

CADC is designed to facilitate both personal and business on-chain transactions in Canadian dollars, offering instant and around-the-clock settlement. The company described use cases highlighting the ability for a freelance developer in Halifax to receive funds from a client in Vancouver in seconds, and for businesses, such as a Toronto-based importer, to settle payments with overseas suppliers in real time-without relying on traditional banking timelines or incurring extra costs.

The stablecoin is intended to provide real-time settlement, uninterrupted access, wholesale foreign exchange rates, and high liquidity for Canadian dollar transactions on blockchain networks.

In pursuit of regulatory compliance, Loon has already pre-filed a prospectus with the Alberta Securities Commission as an initial step toward obtaining full regulatory approval. As part of the Canadian Securities Administrators, the ASC classifies stablecoins as securities rather than assets. 

The firm plans to continue collaborating with regulators to address standards and accountability in the stablecoin sector.

Boris Wertz, Founder & General Partner at Version One Ventures, commented, "We believe the next generation of financial infrastructure will be built on open, transparent rails. Loon is creating the foundation for a digital Canadian dollar, a critical step toward a more inclusive and sovereign financial system."

Loon has announced that in the coming weeks, it will begin integrating its distribution partners. These include virtual currency exchanges, fintech applications, and liquidity providers as part of its plan to support broader adoption of CADC across the Canadian digital economy.