Coinbase noted that Tether’s USDT doesn’t meet their listing standards for Canada and thus they decided to suspend the stablecoin.
By the end of this month on August 31, crypto exchange Coinbase has decided to suspend the trading of Tether’s USDT stablecoin along with DAI, and RAI, for Canadian users.
The crypto exchange sent an email notice to users on Thursday, August 17, stating that they have been regularly monitoring the assets making sure they meet their listing standards. Thus, based on their review, they have decided to suspend trading for the above-mentioned stablecoins for Canadian users.
It’s just four days before that crypto exchange Coinbase launched its Canadian subsidiary. “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 exchange noted.
Coinbase carried out the Canadian launch in collaboration with an open banking platform named Trustly. “Working with Trustly allows users a more seamless experience to make deposits, withdrawals, and high-value daily transaction limits,” a company spokesperson said.
Crypto exchange Coinbase believes that the Canadian government offers a better regulatory approach through dialogue. Unlike America’s “regulation by enforcement” approach, Canada undertakes a “regulation by engagement” approach.
Tether’s USDT Listing Issues in Canada
In the earlier part of this year, Crypto.com, another digital asset exchange, removed USDT support for its Canadian users. In 2021, the Ontario Securities Commission imposed a ban on USDT, although the reasons for this ban were not explicitly stated.
On February 22, the Canadian Securities Administrators (CSA) released a notification mandating registered cryptocurrency exchanges, or those awaiting registration, to enter into legally binding agreements with the regulatory authority. Additionally, 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 functions as a stablecoin backed by fiat reserves, while Dai operates as a hybrid stablecoin, blending fiat and algorithmic elements. In contrast, RAI stands as an algorithmic stablecoin with no specific asset peg. Presently, the Canadian Securities Administrators (CSA) has only endorsed USD Coin as a stablecoin eligible for listing on centralized cryptocurrency exchanges.