Tether (USDT), Dai (DAI), and RAI stablecoins will no longer be available for trade on Coinbase’s Canadian platform as of August 31 due to legislative changes in the country. The company emailed customers on August 17 to inform them of the suspension, saying it was due to a routine check of assets listed on the exchange to verify they fulfilled listing criteria.
Canadian users can still deposit and withdraw these stablecoins after the deadline, though trading services will no longer be available. The notice coincides with Coinbase‘s recent official launch of its Canadian subsidiary, which had already been offering services to Canadian customers before its establishment.
Coinbase Canada, Inc. has applied for but has not yet been granted registration in some Canadian provinces. Meanwhile, the corporation has committed to following an undertaking that appears to be by rules established by the CSA.
Regulatory climate impacts other exchanges
After the Ontario Securities Commission (OSC) prohibition, Crypto.com likewise stopped offering USDT to Canadians this year. The OSC’s suspension did not explain why it was being enforced. Without the CSA’s express written permission, neither purchasing nor depositing Value-Referenced Crypto Assets (often referred to as stablecoins) is permitted on crypto exchanges that are either registered or in the process of becoming registered.
crypto dot com to delist USDT pic.twitter.com/3KD0gJlMkE
— chortly (@charleschortle) January 10, 2023
Tether, a stablecoin backed by fiat reserves, and Dai and RAI, which operate as hybrid and algorithmic stablecoins, are under scrutiny in Canada. The only CSA-approved stablecoin for listing on centralized crypto exchanges is currently Circle’s USD Coin (USDC).
This regulatory tightening led to cryptocurrency exchange OKX’s withdrawal from Canada in June, with Binance, also scheduled to exit by September. Both exchanges cited new regulations as their reason for leaving.
Coinbase sees opportunity in Canada
Despite the challenges, Coinbase remains optimistic about the Canadian market. On August 14, the company announced an expansion of its services through a partnership with the local financial services firm Peoples Trust Company. It now offers all its users the option to deposit and withdraw money via the Interac e-Transfer service, a highly requested feature from Canadian users.
Nana Murugesan, Vice President for International and Business Development at Coinbase, believes Canada’s high levels of crypto awareness, enthusiastic tech ecosystem, and progress toward a robust regulatory framework make it a potential global leader in the crypto economy.
Coinbase entered the Canadian market as other exchanges, including Binance and ByBit, left due to tightening regulations. The CSA introduced rules that mandated exchanges to sign on to terms and conditions while their registration applications were still under review.
Unfortunately, today we are announcing that Binance will be joining other prominent crypto businesses in proactively withdrawing from the Canadian marketplace.
We would like to thank those regulators who worked with us collaboratively to address the needs of Canadian users.…
— Binance (@binance) May 12, 2023
Coinbase’s Canadian expansion, though relatively smooth, contrasts with its ongoing legal battles in the United States. Despite these struggles, Coinbase CEO Brian Armstrong remains optimistic about the regulatory climate in Canada and other countries, including Europe, the UK, Singapore, and Australia.
Coinbase’s commitment to the Canadian market includes the recent hiring of Lucas Matheson as country director and the addition of over 200 engineers in its Toronto and Vancouver offices. This dedication comes when other trading platforms like Binance, the world’s largest crypto platform by trading volume, have announced their departure from Canada due to increased regulatory oversight.
Coinbase’s decision to suspend USDT trading in Canada reflects its commitment to compliance and adaptation to local regulatory changes. While regulatory uncertainty remains a concern, the company’s continued investment in the Canadian market signifies its belief in the potential for growth and positive developments in crypto.
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