Coinbase, the largest crypto exchange in the US by trading volume, has moved to delist three stablecoins for Canadian users just a few days after its official launch in the country.
Coinbase To Delist RAI, DAI, USDT
In an email sent to customers, the crypto exchange announced that its users in Canada would no longer be able to trade stablecoins RAI, DAI, and USDT starting from the end of August, citing issuers’ failure to meet listing standards.
The email read:
We regularly monitor the assets on our exchange to ensure they meet our listing standards. 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 12pm ET.
This suspension will only apply to trading, as users can still deposit and withdraw tokens in their RAI, DAI, and USDT wallets.
Coinbase asserts that this suspension was simply because of the stablecoins failing to meet listing standards. However, there may be a reason to believe that Canadian authorities could have easily influenced this decision.
Last year, Canadian Securities Administrators (CSA) clarified, in its business plan, that stablecoins might qualify as securities and warned crypto trading platforms in the country (whether registered or unregistered) of enabling trading of these stablecoins to Canadian clients. As such, the CSA may have pressured Coinbase to remove support for the stablecoins since it considers them “securities.”
If that is the case, it is worth mentioning that Coinbase hasn’t moved to remove its stablecoin USDC, which is a direct competitor to USDT, with both tokens having the largest market cap in the stablecoin industry.
COIN stock falls alongside crypto market | Source: Coinbase Global, Inc. on TradingView.com
Coinbase Yet To Be Fully Registered
Coinbase announced its official launch in Canada on August 14. However, as deduced from the email, the crypto exchange hasn’t been fully registered in the country. Coinbase stated that it had filed an application to operate in certain Canadian jurisdictions but was yet to obtain approval. Until then, it will continue to abide by the terms of the pre-registration undertaking (PRU) it signed in March.
Last year, the Canadian Securities Administrators (CSA) announced that crypto trading platforms in the country were expected to “provide a pre-registration undertaking to their principal regulator to continue operations while their application is reviewed.” These crypto platforms are still expected to abide by guidelines applicable to registered platforms while they await approval.
If Coinbase succeeds in gaining these approvals, it could well enjoy a huge chunk of the crypto market in Canada in the absence of Binance, the world’s largest crypto exchange by trading volume. Binance left the Canadian market in May following the introduction of stricter crypto regulations in the country.