Coinbase, has decided to halt trading activities involving USDT, DAI, and RAI stablecoins for its Canadian customers. This decision, which comes on the heels of their recent entry into the Canadian market, is scheduled to take effect from September 2023, following an official announcement on August 17.
The driving force behind this decision is Coinbase’s dedication to upholding stringent listing standards. This commitment entails conducting regular assessments of the assets featured on its platform. Although trading for the mentioned stablecoins will cease, Canadians can still deposit, withdraw these assets until the suspension takes effect.
Regulatory Adjustments Impact Canadian Exchanges and Stablecoins like USDT, DAI and RAI
Coinbase Canada, Inc. is currently navigating regulations and seeking registration in various Canadian provinces. Despite this ongoing process, the company remains dedicated to upholding its existing regulatory commitments.
This move is not unique, as Crypto.com, another key player in crypto exchanges, has also chosen to eliminate USDT from its Canadian offerings.
The choice appears linked to a 2021 Ontario Securities Commission ruling that restricted USDT, without revealing the reasoning. In February 2023, the Canadian Securities Administrators (CSA) directed crypto exchanges – whether registered or pursuing registration – to form enforceable agreements with the regulatory body.
These guidelines make it clear that crypto asset trading platforms (CTPs) cannot enable the purchase or deposit of Value-Referenced Crypto Assets (stablecoins) via crypto contracts without CSA’s prior written approval. USDT, a stablecoin linked 1:1 to the US Dollar, is prominently affected by this rule.
In comparison, DAI combines fiat and algorithmic stablecoins, while RAI is a purely algorithmic stablecoin without underlying asset ties. Currently, USDC is the sole CSA-approved stablecoin for centralized cryptocurrency exchange trading.
The evolving regulatory landscape is causing ripples in the crypto industry. Exchanges are adjusting their offerings to match changing guidelines. Coinbase’s delisting of stablecoins for Canadian users highlights the dynamic nature of the sector as stakeholders navigate regulatory changes.
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