Ako Technologies is not a bank and it is not issuing the stablecoin.
We are currently looking for a partner bank willing to offer the stablecoin from our platform. We offer a solution for an OSFI regulated bank to offer a stablecoin and blockchain GIC, but we are not a bank ourselves.
The stablecoin is designed to evidence a bank deposit at a regulated bank. Any user that has been verified by us can purchase and redeem the stablecoin from the bank, through the platform we are developing.
Any holder can exchange it for money at the issuing bank or transfer it to other individuals or smart contracts without the bank being involved in the transfer. It can be used to pay for anything that could also be paid by fiat money, except that it lives on the blockchain and can be used by smart contracts.
No, our stablecoin is not a security under Canadian laws. It is akin to a chequing account or a GIC with a regulated bank. Securities laws of all provinces explicitly exempt these products from securities requirements, which is not the case of other stablecoins on the market.
Most fiat-backed stablecoins currently on the market are either unsafe, illegal or both.
Tether and the other stablecoins are unsafe because they lack transparency (their reserves are not subject to banking regulation and auditing – there is no way to know for sure that they really exist even when they are allegedly “audited”).
Many are also unsafe because the reserves would be seized by the issuer’s creditors if it ever became insolvent, which is a very real possibility. Most stablecoins are also illegal in many jurisdictions for one or many reasons: because they would be considered a security illegally distributed (claims to the contrary are dubious), because the issuer acts as a bank without having the proper licences or because they are not following proper anti money laundering procedures. It is a matter of when, not if, regulators will act against issuers not complying with the law.
A bank-issued stablecoin is both safe and legal. It is the only solution that should be trusted if serious money is involved.
The stablecoin will initially be available on the Ethereum blockchain. Stellar and J.P.Morgan Quorum are other blockchains that will become available at a latter stage.
Initially, only entities and individuals that have an address in Canada will be able to receive and redeem the stablecoin directly from the bank. However, tokens can be traded on cryptocurrencies exchanges and can be available to anyone in the world through this market.