Calgary-based Tetra Trust has fuelled up to expand beyond its roots as a regulated cryptocurrency custodian.
Tetra Trust has formed a new parent company called Tetra Digital Group, which has closed $10-million CAD in funding to launch a Canadian-dollar stablecoin and expand its newly-launched Tetra Unity software business.
Fellow Canadian crypto and FinTech firms, as well as banks and other financial institutions, have bought into Tetra’s vision. Tetra Digital Group’s all-equity financing closed last week and was supported by existing backer Urbana Corporation, as well as new investors like ATB Financial, National Bank, Purpose Unlimited, Shakepay, Shopify, and partner Wealthsimple (Hanna Zaidi, vice-president of payments strategy & chief compliance officer at Wealthsimple, sits on BetaKit’s board). About 30 percent of this funding consisted of secondary capital that went to early Tetra investors.
“I think everybody’s very interested in the stablecoin and Canadian stablecoin problem.”
Didier Lavallee,
Tetra Digital Group
“I think everybody’s very interested in the stablecoin and Canadian stablecoin problem,” Tetra Digital Group CEO Didier Lavallee told BetaKit in an interview.
Lavallee characterized this group of investors as a selection of “well-respected Canadian brands” interested in supporting Canadian infrastructure providers. “There is a sense of sovereignty here,” he said. The CEO argued that their investment recognizes digital assets as “an important and growing space for financial innovation in the country.”
“It’s rare for such a broad group of high-quality companies to work together on a project like this,” Wealthsimple chief legal officer Blair Wiley said in a statement.
Founded in 2019 in response to QuadrigaCX, Tetra Trust was initially based in Toronto and incubated within the regulated Canadian crypto trading platform Coinsquare. The company stores digital assets for crypto exchanges and a range of other entities, including exchange-traded funds and family offices, leveraging third-party cold storage.
In 2021, Tetra Trust became Canada’s first regulated crypto custodian after receiving approval as a licensed trust company in Alberta and a qualified national-level custodian. Fellow Calgary crypto custodian Balance took a similar path last year. Balance and Tetra Trust both moved from Toronto to Calgary to take advantage of Alberta’s more crypto-friendly regulations.
Toronto crypto firm WonderFi acquired Coinsquare and its Tetra Trust stake in 2023. Earlier this year, Urbana purchased a significant portion of WonderFi’s interest in Tetra Trust, bringing its total equity stake to nearly 56 percent. WonderFi has agreed to a sale to US-based Robinhood, which plans to develop its offering in Canada in a move that could put it in competition with Wealthsimple. Following this financing, Lavallee said that WonderFi is no longer a Tetra shareholder.
Tetra Trust currently has about 15 employees and holds more than $2.5 billion CAD in digital assets under custody. Since 2021, prior to this round, Tetra Trust had raised $15 million in equity funding and sold $10 million in secondary. Tetra Trust reached profitability last year, and Lavallee expects the company to generate between $6 million and $10 million in revenue in 2025.
Lavallee said Tetra plans to use 30 percent of this funding to create a new subsidiary to launch that Canadian stablecoin (which investors will receive a stake in) and the remainder to support both its core crypto custody business and accelerate the growth of its software offering.
He noted that Tetra Trust developed an in-house platform for managing different crypto tech stacks and its custody operations before eventually realizing that others had the same problem. Sensing a market opportunity, earlier this year, Tetra Trust spun out the product as the standalone Tetra Unity offering that helps clients simplify fund and treasury management by integrating their wallets, custodians, and reporting across jurisdictions.
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While Tetra Trust’s custody operations are restricted to Canada, Lavallee said this software is a global play and that he sees room for Tetra to bundle its offerings.
The value of stablecoins is pegged to that of another reserve asset beyond crypto. In the case of fiat-backed stablecoins, that asset is typically a fiat currency like the US dollar. While stablecoins are usually less volatile than other digital currencies, problems at companies like Terra indicate they are not always as reliable as their name suggests.
As The Logic has reported, the United States (US) is now ready to take stablecoins mainstream, whereas Canada is not. Some experts have said this leaves Canada in peril of missing the opportunities with stablecoins while also being unprepared for the associated risks.
“Canada is in this situation because there is a lack of clarity at the federal level right now in terms of how to treat stablecoins,” Lavallee argued.
Until now, like most other crypto products, stablecoins have largely been used to facilitate speculative trading by helping users swap digital assets on exchanges. But experts say the US passage of the crypto-focused GENIUS Act could unleash a tidal wave of new stablecoins by paving the way for issuances from banks and other institutions.
RELATED: Canada’s digital sovereignty: why we can’t ignore stablecoins
The US Treasury Borrowing Advisory Committee has predicted that the sector will grow eightfold, to $2 trillion USD by 2028.
Canada’s Department of Finance has been working with the Office of the Superintendent of Financial Institutions and Bank of Canada to develop its own federal legislation to govern stablecoins. In the absence of a clear framework, the Canadian Securities Administrators (CSA) has stepped in with plans to treat fiat-backed stablecoins as securities or derivatives, much to the dismay of Canadian crypto companies.
Advocates for stablecoins have argued that they will bring more competition and innovation to Canada’s concentrated banking sector, making the case that Canada is falling behind on this front and putting pressure on the feds to prioritize them.
“The current path Canada is on in terms of regulated stablecoins as securities through prospectus offerings is problematic for payments and transactional flow,” Lavallee argued. “It restricts the use cases. It restricts who can touch this.”
Lavallee claimed that the approach Tetra plans to take, which involves using its trust licence to become the issuer of the token, versus simply filing a prospectus with the CSA, would be “a first for Canada.”
RELATED: Stablecorp secures funding to build out its stablecoin pegged to Canadian dollar
“ATB is playing a key role in the project as a strategic investor and banker for the Canadian dollar stablecoin,” ATB Financial’s Daniel Ordibehesht told BetaKit. “Our participation gives us a seat at the table with Canada’s leading FinTechs and technology companies that are actively shaping a new payment paradigm.”
The Alberta government-owned Crown corporation has become an ally to Canadian crypto and blockchain companies at a time when other financial institutions have refused service. Ordibehesht said ATB’s investment in Tetra Digital Group reflects ATB’s “confidence in the future of digital assets in Canada.”
Fellow investor Shopify has also taken an interest in stablecoins, collaborating with Coinbase and Stripe to support USDC stablecoin payments.
Lavallee said Tetra initially began fundraising to expand its software platform before it was approached about the possibility of using its trust status to launch a stablecoin. He said Tetra explored the idea and saw demand for a Canadian stablecoin, and the desire to bring a new regulatory model to the marketplace.
“Everybody wants to do a G7 basket and CAD is missing,” the CEO said. He claimed many players the company spoke with were also reluctant to go the prospectus route because it exposes them to securities regulation, and saw a chance for Tetra to play a role.
“Canada is in this situation because there is a lack of clarity at the federal level right now.”
Didier Lavallee, Tetra Digital Group
Toronto’s Stablecorp is also building out its own stablecoin pegged to the Canadian dollar, with support from Tetra, and a prospectus-based approach.
Lavallee said Tetra has already filed a formal application with its primary regulator to launch its own Canadian dollar-backed stablecoin. Pending regulatory approval, Tetra hopes to make the currency available in early 2026.
This Tetra stablecoin will leverage Tetra Digital Group’s institutional-grade custody infrastructure to provide businesses and consumers with a stable, secure, and fully compliant digital currency backed one-for-one by Canadian dollar reserves. Tetra Trust will act as the issuer.
Lavallee said Tetra envisions this stablecoin potentially proving that regulated institutions can transact with a Canadian-equivalent token efficiently and programmatically. Over time, he hopes it could play a role in enabling faster, lower-cost payments for Canadians more generally.
Through this project, the CEO said Tetra intends to operate with a high level of transparency. He added that he sees it as a potential learning opportunity for the feds and regulators.
“We think it’s a good and different approach, and potentially will lead to discussions around [if] we have the appropriate framework currently in place in Canada,” Lavallee said.
Feature image courtesy Tetra Trust.