Coinbase will suspend USDT, DAI, and RAI trading for Canadian customers
Date: 2023-08-18 Author: Karina Ziganova Categories: CRYPTO PAYMENTS, BUSINESS
Coinbase is ending support for Tether (USDT), DAI, and RAI for its Canadian users effective August 31st. This was first reported by Cointelegraph, citing a client email it reviewed dated Aug. 17.
The exchange wrote to clients that as a result of a recent review, trading in these stablecoins will be unavailable to Canadians from September 1st. However, Canadians will still be able to deposit and withdraw these stablecoins after the deadline.
Coinbase in Canada
The suspension comes amid ongoing efforts by Coinbase Canada, Inc. to secure registration in certain Canadian jurisdictions. “Until Coinbase Canada, Inc. does not receive registration, it will agree to abide by the terms of the commitment,” the exchange said in a statement.
The move by Coinbase follows a similar decision by Crypto.com earlier this year to delist USDT for its Canadian users. Notably, the Ontario Securities Commission banned USDT trading in 2021, although the reasons for this decision remain undisclosed.
More broadly, regulators have tightened their grip on stablecoins in Canada. On February 22, the Canadian Securities Administrators (CSA) required registered crypto exchanges or those in the process of registration to enter into legally binding agreements. The highlight of these agreements is the restriction placed on customers preventing them from buying or depositing certain stablecoins without the prior written approval of the CSA.
Of the stablecoins mentioned, USDT is backed by fiat reserves, DAI functions as a fusion of a fiat and algorithmic stablecoin, and RAI is an algorithmic stablecoin that, although backed by ETH, is not pegged to any particular asset. Currently, the CSA only approves USDC (USD Coin) for listing on centralized crypto exchanges.
The tightening of Canadian regulation prompted the OKX crypto exchange to pull out of the Canadian market in early June. Binance, another global exchange, is also set to exit Canada by September.
Coinbase's decision to restrict stablecoin trading is particularly noteworthy given its recent expansion into the Canadian market following the release of Binance. On August 14, Coinbase announced its entry into the Canadian space, highlighting the country's potential for significant growth. Through a partnership with the Peoples Trust Company, Coinbase has introduced Interac payment options, making it easier for its local users to make Canadian dollar transactions.
As the global crypto industry navigates the changing regulatory landscape, market participants will be watching closely to see how this will affect trading, investment, and wider adoption of cryptocurrencies.
