Coinbase to suspend USDT trading for Canadian users

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Cryptocurrency exchange Coinbase will suspend trading of the Tether (USDT), Dai (DAI), and RAI stablecoins for Canadian users beginning Aug. 31.

In an Aug. 17 email notice to users, Coinbase said, ”We regularly monitor the assets on our exchange to ensure they meet our listing standards,” and based on its review, trading of the aforementioned stablecoins will no longer be available to Canadian users starting September. The exchange officially launched its Canadian subsidiary just days prior, although services were available to Canadian customers before then. 

Canadian users can still deposit and withdraw the stablecoins after the deadline. In a statement, the exchange wrote:

“Coinbase Canada, Inc. has filed an application for registration in certain Canadian jurisdictions but has not yet obtained registration. Until such time as Coinbase Canada, Inc. obtains registration, it has agreed to abide by the terms of an undertaking.”

The Aug.17 notice to Canadian users. Source: Coinbase

Earlier this year, fellow digital asset exchange Crypto.com delisted USDT for Canadian users. The Ontario Securities Commission banned USDT in 2021, though it never explained the rationale behind the ban. 

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On Feb. 22, the Canadian Securities Administrators (CSA) published a notice requiring registered crypto exchanges or those pending registration to sign legally binding undertakings with the regulatory body. Among other items, the undertaking requires:

“A prohibition on the part of the CTP [crypto asset trading platforms] in respect of clients buying or depositing Value-Referenced Crypto Assets (commonly referred to as stablecoins) through crypto contracts without the prior written consent of the CSA.”

Tether is a stablecoin backed by fiat reserves. Meanwhile, Dai exists as a hybrid between a fiat and algorithmic stablecoin. RAI, on the other hand, is an algorithmic stablecoin not pegged to any asset. Currently, the only stablecoin approved by the CSA for listing on centralized crypto exchanges is USD Coin (USDC). 

Citing the new regulations, crypto exchange OKX withdrew from Canada in June. Similarly, crypto exchange Binance is scheduled to withdraw from Canada by September. 

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