Effective August 31, Canadian users of the cryptocurrency exchange Coinbase will face a suspension of trading activities involving Tether (USDT), DAI, and RAI stablecoins. This decision comes as part of Coinbase's ongoing efforts to ensure compliance with its listing standards.
In a recent communication dated August 17, Coinbase officially informed its users about the upcoming change. The exchange clarified that it continually evaluates the assets available on its platform to ensure they align with its stringent listing criteria. As a result of this review, trading services for the aforementioned stablecoins will no longer be accessible to Canadian users starting from September onward.
Despite the trading suspension, Canadian users will retain the ability to deposit and withdraw the specified stablecoins beyond the stated deadline. Coinbase Canada, Inc., the entity responsible for the Canadian operations, has submitted an application for registration in specific Canadian jurisdictions. However, as registration approval is still pending, the company has committed to adhering to specific terms as part of an undertaking.
This move follows the precedent set earlier this year when another prominent digital asset exchange, Crypto.com, also ceased offering USDT services to Canadian users. The Ontario Securities Commission had imposed a ban on USDT in 2021, yet the reasons behind this decision were never explicitly outlined.
On February 22, the Canadian Securities Administrators (CSA) issued a notice that mandates registered or pending crypto exchanges to enter into legally binding undertakings with the regulatory body. One of the key aspects of this undertaking involves obtaining prior written consent from the CSA before facilitating clients' purchase or deposit of Value-Referenced Crypto Assets, commonly known as stablecoins, via crypto contracts.
Tether is recognized as a stablecoin backed by fiat reserves, while DAI represents a hybrid stablecoin blending fiat and algorithmic mechanisms. Conversely, RAI stands as an algorithmic stablecoin without any asset peg. Notably, the Canadian Securities Administrators have sanctioned only one stablecoin, USD Coin (USDC), for listing on centralized crypto exchanges.
The evolving regulatory landscape prompted OKX, another crypto exchange, to withdraw its operations from Canada in June. This action mirrors the wider trend of exchanges aligning their services with the emerging regulatory framework.