Coinbase Responds to Canadian Regulations: Suspends USDT, DAI, and RAI Stablecoins

The US-based cryptocurrency exchange, Coinbase has announced its decision to halt trading of prominent stablecoins, namely Tether (USDT), Dai (DAI), and RAI Reflex Index (RAI), for its Canadian users starting from the end of this month. This significant step was reportedly taken by the company in response to regulatory changes in the country.

Coinbase noted in an email sent to users yesterday (Thursday) that the suspension of trading for USDT, DAI, and RAI is a result of its ongoing assessment of listed assets, ensuring they meet the platform’s stringent listing standards.

Coinbase’s Response to Regulations

"Based on our most recent reviews, Coinbase will suspend trading in Canada for RAI Reflex Index (RAI), Dai (DAI), and Tether (USDT) on August 31, 2023, around 12 PM ET," the exchange wrote to its users. However, Coinbase emphasized that users will still be able to deposit and withdraw these impacted stablecoins, adding that customers could still manage their holdings.

This development comes closely on the heels of Coinbase’s expansion of services in the Canadian market. Four days ago, Finance Magnates reported that the crypto asset exchange had ventured into the Canadian market through a partnership with Peoples Trust Company. As part of its expansion strategy, Coinbase said it was extending its Coinbase One membership to Canadian users.

Coinbase is not the only cryptocurrency exchange halting stablecoin usage in Canada; in January, Crypto.com announced its decision to delist Tether’s stablecoin (USDT) in the country. The exchange told Canadian users facing the delisting of Tether (USDT) on Crypto.com that they had two options before the end of January: they could either withdraw their USDT assets or convert them to other tokens.

Canada’s Evolving Regulatory Landscape

The broader crypto industry in Canada is undergoing a significant shift due to regulatory changes and crackdowns on unregulated exchanges. Binance, the world’s leading crypto exchange by trading volume, ceased accepting new users in Ontario rather than complying with the securities laws.

In May, According to Reuters, Binance expressed its disagreement with the latest regulatory guidance in Canada while emphasizing its willingness to engage with the regulators in the country. However, the exchange remained optimistic about its return to Canada in the future. Its CEO, Changpeng Zhao, a Canadian national himself, expressed hope that a more favourable regulatory environment could be established in the country.