Key Insights
- Coinbase will suspend trading Tether (USDT), DAI, and RAI stablecoins for Canadian users starting September 1st.
- The decision follows a review of assets to ensure they meet Coinbase’s listing standards.
- New Canadian regulatory requirements have prompted exchanges like Coinbase, OKX, and Binance to adjust their operations.
Cryptocurrency exchange Coinbase has announced its decision to suspend trading of Tether (USDT), DAI, and RAI stablecoins for Canadian users, effective from August 31st.
The move comes as Coinbase diligently maintains its asset listing standards.
Coinbase Halts Tether, DAI, and RAI Stablecoins
In a communication sent out to users on August 17th, Coinbase explained that it periodically evaluates the assets on its platform to ensure they align with its listing criteria.
Following this review, trading of the mentioned stablecoins will cease to be available for Canadian users starting September.
This announcement follows closely after the recent launch of Coinbase’s Canadian subsidiary, although services for Canadian customers were already accessible prior to the formal launch.
Despite the trading suspension, Canadian users will still be able to make deposits and withdrawals involving these stablecoins after the given deadline.
Impact on Crypto Exchanges Operating in Canada
Coinbase Canada, Inc. has filed an application for registration in specific Canadian jurisdictions, and while it awaits registration approval, the company has committed to complying with the terms of an undertaking.
Notably, earlier this year, Crypto.com, another digital asset exchange, also delisted USDT for Canadian users. The move was in response to the Ontario Securities Commission’s 2021 ban on USDT, which, however, lacked a detailed explanation for the decision.
In a significant development, the Canadian Securities Administrators (CSA) issued a notice on February 22nd, requiring registered or pending crypto exchanges to establish legally binding agreements with the regulatory body.
Among the stipulations of the undertaking is the prohibition of crypto asset trading platforms (CTPs) allowing clients to buy or deposit Value-Referenced Crypto Assets, commonly known as stablecoins, via crypto contracts without the prior written consent of the CSA.
Tether, a stablecoin backed by fiat reserves, is one of the impacted assets. DAI, on the other hand, presents itself as a hybrid stablecoin, combining elements of both fiat and algorithmic stability. RAI, distinctively, operates as an algorithmic stablecoin without a peg to any specific asset. At present, the only stablecoin endorsed by the CSA for listing on centralized crypto exchanges is USDC (USD Coin).
Citing these new regulatory requirements, OKX, a crypto exchange, pulled out of the Canadian market in June. Similarly, crypto giant Binance has confirmed its plans to withdraw from the Canadian market by September.