Coinbase is ending support for Tether (USDT), DAI and RAI for its Canadian users effective August 31. The news was first reported by Cointelegraph, citing an email from a customer who reviewed it on Aug. 17.
The exchange wrote to clients that, as a result of a recent review, trading in these stablecoins would no longer be accessible to Canadians from September 1. However, Canadians can still deposit and withdraw these stablecoins after the deadline.
Coinbase in Canada
The suspension stems from the continued efforts of Coinbase Canada, Inc. to secure registration in specific Canadian jurisdictions. “Until Coinbase Canada, Inc. obtains registration, it has agreed to abide by the terms of an undertaking,” the exchange said in its statement.
This move by Coinbase follows a similar decision earlier this year by Crypto.com to remove USDT for its Canadian users. Notably, the Ontario Securities Commission banned USDT from trading in 2021, though the reasoning behind the decision is not being disclosed.
In a broader context, regulatory oversight of stablecoins in Canada has tightened. On February 22, the Canadian Securities Administrators (CSA) directed 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 customers, preventing them from buying or depositing certain stablecoins without the prior written consent of the CSA.
Among the listed stablecoins, 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 tied to any specific asset. At this time, the CSA only approves USDC (USD Coin) for listing on centralized crypto exchanges.
The tightening of Canadian regulations prompted crypto exchange OKX to exit the Canadian market earlier in June. Binance, another global exchange, will also withdraw from Canada in September.
Coinbase’s decision to restrict stablecoin trading is especially noteworthy given its recent expansion into the Canadian market following Binance’s exit. On August 14, Coinbase announced its entry into the Canadian space, highlighting the country’s potential for significant growth. Through a partnership with Peoples Trust Company, Coinbase introduced Interac payment options, streamlining Canadian dollar transactions for local users.
As the global crypto industry navigates changing regulatory landscapes, market participants will be watching closely to gauge the impact on trading, investment and the wider adoption of cryptocurrencies.