Coinbase Stops Trading In Tether, DAI, And RAI In Canada

Coinbase stop trading stablecoins in Canada. (Photo; Doc. Coincholik)

JAKARTA - Coinbase, one of the leading crypto exchanges, has taken important steps by announcing the termination of support for stablecoin Tether (USDT), DAI, and RAI for users in Canada.

The move was announced in an email to customers and will take effect from August 31. This announcement, which was first reported by Cointelegraph, has rocked the crypto community in Canada and brought attention to tougher regulatory changes in the industry.

Coinbase, which recently expanded its presence to the Canadian market, explains that this stablecoin trade will no longer be accessible to Canadians from September 1. However, users can still make deposits and withdrawals using these stablecoins after that date.

The move comes amid Coinbase Canada's Inc. efforts to obtain registration in certain jurisdictions in Canada. The company stated that it would comply with business requirements before obtaining full registration.

Coinbase isn't the only exchange facing increasingly stringent regulations in Canada. Crypto.com has previously removed support for USDT for Canadian users, following a trade ban imposed by the Ontario Securities Commission in 2021.

Tighter regulations on stablecoins are increasingly felt in Canada. In February, Canadian Securities Administrator (CSA) issued a regulation requiring crypto exchanges to be registered or which are in the registration process to sign legally binding agreements. This agreement imposes restrictions on clients, seeking written approval from CSA before buying or depositing certain stablecoins.

In this context, the characteristic differences of these affected three stablecoins become relevant. USDT is supported by fiat reserves, while DAI creates a balance between fiat and algorithm models. On the other hand, RAI is an algorithmic stablecoin that is not tied to a given asset, albeit supported by ETH.

Coinbase's tough move also impacts the crypto exchange industry as a whole. The OKX and Binance exchanges have announced their decision to leave the Canadian market, which is driven by increasingly assertive regulations.

However, in terms of accepting cryptocurrencies in Canada, Coinbase has introduced the latest solution. Through collaboration with the People's Trust Company, Coinbase has launched an Interac payment option, facilitating transactions in the Canadian Dollar for local users.

Despite the ongoing regulatory challenges, market participants will closely monitor these developments, as cryptocurrencies continue to seek to find a foothold in the rapidly changing global financial landscape.