Canadian crypto regulations take a swipe at Coinbase's offerings.
Coinbase, a well-known cryptocurrency exchange, recently announced an upcoming suspension of certain stablecoin trades for its users in Canada.
The action, set to commence on August 31st, will affect three stablecoins Tether (USDT), Dai (DAI), and RAI.
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Having just established its subsidiary in Canada, the platform was quick to send out an email on August 17th informing its Canadian clientele about the impending changes.
In the message to its customer, the crypto exchange claimed that it "regularly monitors the assets on <their> exchange to ensure they meet <their> listing standards,” thus revealing that post-review, trading for the mentioned stablecoins won't be possible.
Notably, while the formal launch of the subsidiary was recent, Canadian users had access to Coinbase's services well before this. Despite these trading restrictions, Coinbase has assured its users in Canada that they can deposit and withdraw the affected stablecoins after the given deadline.
Expounding on the matter, the crypto exchange wrote in an email:
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.
This isn't the first time a cryptocurrency platform has taken such a step in Canada. Crypto.com, another crypto exchange, had already delisted USDT for its Canadian audience earlier. Moreover, without revealing specific reasons, the Ontario Securities Commission banned USDT in 2021.
Shedding light on the broader regulatory context, the Canadian Securities Administrators (CSA) issued a notice on February 22nd. It mandated all registered or registering crypto exchanges to reach formal commitment with the regulatory entity. A standout clause from this mandate reads:
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.
Only the USD Coin (USDC) has secured CSA's approval for listings on centralized crypto exchanges in Canada.
Other crypto exchanges are also navigating these Canadian regulatory waters. OKX decided to exit the Canadian market in March, citing the new regulatory environment. Likewise, Binance is poised to leave Canada by September.
As regulations around stablecoins tighten in Canada, leading crypto exchanges like Coinbase are making changes to stay compliant. While this may affect trading opportunities for certain stablecoins, it underscores the evolving nature of the crypto regulatory landscape in the country.
