Disclosure: Bullpen receives compensation from VersaBank for research coverage. VersaBank is also an IR client of LodeRock Advisors, an affiliate of Bullpen.

VersaBank (VBNK) was up more than peers yesterday after announcing it will serve as the custodian for Stablecorp’s QCAD, the first regulatory compliant Canadian-dollar stablecoin. With no QCAD in circulation yet, the financial impact isn’t clear…

… so yesterday’s bid was likely driven by optimism around the digital asset strategy, with big names like Circle and Coinbase backing Stablecorp. Success as a custodian and deposit token issuer would add a low cost funding source…

… which could support growth in the core business at better margins, depending on the durability of these balances.

Importantly, any incremental wins here are upside - as we don’t include this nascent line of business in our valuation analysis.

Get our VersaBank report

You might be interested in…

About Bullpen: Bullpen Finance Inc. publishes content on Canadian markets and provides paid research coverage of select Canadian issuers. Bullpen is paid in cash by covered issuers, does not accept stock or options, does not hold positions in covered securities, and does not conduct investment banking business. Bullpen and LodeRock Advisors Inc. are affiliated; LodeRock provides investor relations services to issuers, some of whom are covered by Bullpen Research. When a post discusses a covered issuer, a specific disclosure appears at the top of the post. This post is published for general information purposes. It is not personalized investment advice and is not tailored to any individual reader’s circumstances. Bullpen is not a registered investment adviser or dealer. For full disclosures, including analyst certification, jurisdictional statements, and conflict of interest policies, please see our Legal & Disclosures section on our website.