Coinbase is discontinuing its support for Tether (USDT), DAI, and RAI for its Canadian users, effective August 31. The news was first reported by Cointelegraph, citing a customer email it had reviewed dated Aug. 17.
The exchange wrote to customers that, as a result of a recent review, trading of these stablecoins would be inaccessible to Canadians from September 1 onwards. However, Canadians will still be able to deposit and withdraw these stablecoins after the deadline.
Coinbase in Canada
The suspension comes amid Coinbase Canada, Inc.’s ongoing efforts to secure registration in specific Canadian jurisdictions. “Until such time as Coinbase Canada, Inc. obtains registration, it has agreed to abide by the terms of an undertaking,” the exchange mentioned in its statement.
This move by Coinbase follows a similar decision earlier this year by Crypto.com to delist USDT for its Canadian users. Notably, the Ontario Securities Commission banned USDT trading in 2021, though the reasoning behind the decision remains undisclosed.
In a broader context, regulatory scrutiny over stablecoins has tightened in Canada. On February 22, the Canadian Securities Administrators (CSA) mandated registered crypto exchanges, or those in the process of registration, to enter into legally binding agreements. A highlight of these agreements is the restriction placed on clients, preventing them from buying or depositing certain stablecoins without the CSA’s prior written approval.
Of the stablecoins mentioned, USDT is backed by fiat reserves, DAI functions as a fusion between fiat and algorithmic stablecoin, and RAI stands as an algorithmic stablecoin that, while backed by ETH, is not pegged to any specific asset. At present, the CSA only approves USDC (USD Coin) for listing on centralized crypto exchanges.
The tightening grip of Canadian regulations prompted crypto exchange OKX to exit the Canadian market earlier in June. Binance, another global exchange, is also set to withdraw from Canada by September.
Coinbase’s decision to restrict stablecoin trading is particularly noteworthy given its recent expansion into the Canadian market after Binance’s exit. On August 14, Coinbase announced its entry into the Canadian space, emphasizing the country’s potential for significant growth. Through a collaboration with Peoples Trust Company, Coinbase introduced Interac payment options, streamlining Canadian Dollar transactions for its local users.
While the global crypto industry navigates evolving regulatory landscapes, market participants will be watching closely to gauge the impacts on trading, investments, and the broader adoption of cryptocurrencies.