Leading cryptocurrency exchange Coinbase has announced its decision to temporarily suspend trading of Tether (USDT), Dai (DAI), and RAI (RAI) stablecoins for Canadian users, effective from August 31, 2023. The move comes as the platform takes steps to ensure compliance with its listing standards and regulatory requirements.
In an email notification sent to its user base on August 17, Coinbase stated that they regularly monitor the assets on the exchange to ensure they meet listing standards. Based on the outcome of their comprehensive review, Coinbase will discontinue trading services for the mentioned stablecoins exclusively for its Canadian users, commencing in September.
This development follows the recent launch of Coinbase’s subsidiary in Canada, marking the platform’s official expansion into the Canadian market. However, it is important to note that Coinbase’s services had already been accessible to Canadian customers prior to the formal launch of its subsidiary.
Despite the suspension of trading, Canadian users will still retain the ability to deposit and withdraw Tether, Dai, and RAI stablecoins beyond the specified deadline. Coinbase has emphasized its commitment to regulatory compliance, shedding light on the status of its registration efforts in Canada.
Canadian Crypto Exchanges Respond to Regulatory Changes, Delisting Stablecoins Amidst Growing Uncertainty
The Canadian crypto exchange ecosystem has been hit with a series of significant changes. Earlier this year, Crypto.com, a notable digital asset exchange, made waves by delisting the controversial stablecoin USDT for its Canadian users. This move comes as a response to the Ontario Securities Commission’s 2021 ban on USDT, a decision that has left many questioning the rationale behind the prohibition. Exchanges like Binance and Bybit have left the Canadian space due to regulatory issues.
On February 22nd, the Canadian Securities Administrators (CSA) issued a notable notice that sent ripples throughout the industry. The regulatory body mandated that registered cryptocurrency exchanges or those currently undergoing the registration process must establish legally binding undertakings. These undertakings include a crucial clause that stipulates the prohibition of clients engaging in the purchase or deposit of Value-Referenced Crypto Assets, more commonly known as stablecoins, through crypto contracts. Such transactions would require the prior written consent of the CSA.
Tether (USDT), a stablecoin that boasts backing by fiat reserves, found itself facing a storm of uncertainty due to these regulatory changes. Dai, another player in the stablecoin realm, stands as a hybrid creation, bridging the gap between fiat and algorithmic stability. In contrast, RAI, a unique algorithmic stablecoin devoid of pegging to any specific asset, adds an extra layer of diversity to the market. Presently, among the plethora of stablecoins available, only USD Coin has received CSA’s stamp of approval for listing on centralized cryptocurrency exchanges.