Coinbase will discontinue support for Tether (USDT), DAI, and RAI for Canadian users on August 31. Cointelegraph broke the story first, citing a customer email it had reviewed on August 17.
Coinbase will discontinue
The exchange informed customers that, as a result of a recent review, trading in these stablecoins would be unavailable to Canadians beginning September 1. Canadians will, however, be able to deposit and withdraw stablecoins after the deadline.
Coinbase is available in Canada
The suspension comes as Coinbase Canada, Inc. continues its efforts to obtain registration in specific Canadian jurisdictions.
“Until such time as Coinbase Canada, Inc. obtains registration, it has agreed to abide by the terms of an undertaking,” the exchange stated.
Coinbase’s action follows Crypto.com’s decision earlier this year to delist USDT for its Canadian users. Notably, the Ontario Securities Commission prohibited USDT trading in 2021, though the reasons for the decision are unknown.
In a broader sense, regulatory oversight of stablecoins has increased in Canada. The Canadian Securities Administrators (CSA) mandated registered cryptocurrency exchanges, or those in the process of registration, to enter into legally binding agreements on February 22.
Clients are prohibited from purchasing or depositing certain stablecoins without the CSA’s prior written approval, which is a highlight of these agreements.
Among the stablecoins mentioned, USDT is backed by fiat reserves, DAI is a hybrid of fiat and algorithmic stablecoin, and RAI is an algorithmic stablecoin that, while backed by ETH, is not tied to any specific asset. At the moment, the CSA only allows USDC (USD Coin) to be listed on centralized cryptocurrency exchanges.
Because of the tightening grip of Canadian regulations, crypto exchange OKX exited the Canadian market earlier in June. Binance, another global exchange, is also planning to leave Canada by September.
Coinbase’s decision to restrict stablecoin trading is especially noteworthy given the company’s recent entry into the Canadian market following Binance’s exit.
Coinbase announced its entry into the Canadian market on August 14, emphasizing the country’s significant growth potential.
Coinbase introduced Interac payment options in collaboration with Peoples Trust Company, streamlining Canadian Dollar transactions for its local users.
While the global crypto industry navigates changing regulatory landscapes, market participants will be keeping a close eye on the effects on trading, investments, and broader cryptocurrency adoption.
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