Didier Lavallee, founder and CEO of Tetra Trust Company, joins the Canadian Bitcoin Conference podcast to explain why Canada needs its own stablecoin. Drawing on his background in FX trading and financial services, he argues the Canadian dollar's outsized 6 percent share of global FX flows, plus growing foreign treasury holdings of CAD, make a strong case for a sovereign digital dollar rather than default reliance on US denominated tokens. He details Canada's Stablecoin Act, passed as part of budget legislation, with draft regulations expected in September and full clarity by 2027. Lavallee walks through the evolution from Bitcoin to Ethereum to today's purpose built settlement chains, describes Tetra's business custodying Bitcoin for ETFs, exchanges and family offices, and explains how stablecoins can serve as a bridge and settlement layer for Bitcoin transactions. He closes with observations on remittance corridors, business to business demand, and the risk of Canada's stablecoin market becoming overly bank controlled.
Tetra Trust's Didier Lavallee explains why Canada needs a sovereign CAD stablecoin and how it connects to Bitcoin.
What's the need for Canadian stablecoins today?
About 99 percent of global stablecoin volume is US denominated, but the Canadian dollar is 6 percent of global FX flows despite Canada being roughly 2 percent of global GDP. We think more volume moves onchain over time and you need G7 pairs. There's also a sovereignty issue: moving US stablecoins effectively supports US debt, while a Canadian dollar stablecoin supports Canadian government bonds.
Does Canadian stablecoin adoption end up following Canada's share of global reserves, or does everything end up US denominated?
We look at two signals: global FX flows, where Canada holds 5 to 6 percent, and how many countries hold Canadian dollars in treasury reserves, which has been growing as US dollar holdings decline globally. The caveat is we need a competitive product. US stablecoins are attractive partly because holders can earn yield, so if Canadian regulation blocks yield, our token becomes less usable.
Is there Canadian legislation equivalent to the US Genius Act for stablecoins?
Yes. The Stablecoin Act was embedded in last fall's federal budget as part of Bill C-15 and received royal assent earlier this year. It's now being drafted, with public drafts expected around September, another consultation round after that, and hopefully full law by early 2027. That's fast, about 18 months from introduction to law, and it will treat stablecoins as payment instruments.
How did we get from Bitcoin to stablecoins, and why do stablecoins lean on crypto rails instead of Bitcoin rails?
Bitcoin's usability for everyday payments got debated early on, and stablecoins ended up solving the problem of moving value globally very efficiently. I'd bucket digital assets into Bitcoin, utility tokens like stablecoins and tokenized assets, and meme or gaming tokens. Newer chains built for agentic commerce are now displacing even Ethereum and its layer twos for stablecoin transaction speed.
Is there a role for Bitcoin on the collateral side of stablecoin reserves, like Tether holding gold and Bitcoin?
Our stablecoin is required to be one for one backed by dollar reserves, so we can't substitute Bitcoin there, but we could over collateralize beyond that requirement. We're also exploring paying rewards or yield in Bitcoin rather than in the stablecoin itself, since some Bitcoin focused projects want stablecoin capability for settlement or funding but don't want to accumulate more stablecoins.
What's the outlook for stablecoin growth in Canada over the next three to five years?
We're bullish. Visa and Mastercard are watching the growth rate closely, not just the current 300 billion dollar market size. In Canada our thesis was remittance corridors, but we're actually seeing stronger business to business demand for domestic settlement since real-time rails aren't available yet, plus growing treasury use cases and interest from US Fortune 500 companies with heavy cross-border activity with Canada.
What's Bitcoin's role versus the stablecoin's role in Tetra's business and thinking?
About 75 percent of what we hold in custody for clients is Bitcoin, including for ETFs, trading platforms, and family offices doing multigenerational planning. Stablecoins act as a bridge that brings people into the ecosystem who then learn about Bitcoin, and in a perfect world they're a settlement layer for Bitcoin transactions, more efficient than a traditional fiat leg.
How are things going since Tetra's CAD stablecoin launched on Ethereum and Base on May 4th?
We launched right before a bear market, crypto is down about 50 percent, but there's a bull market in stablecoins happening alongside it. People are incredibly excited about stablecoins and there's a lot of building going on regardless of crypto price action.
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