Coinbase’s Strategic Retreat
Merely days into its much-anticipated Canadian venture, Coinbase has taken the crypto community by surprise. The globally renowned crypto exchange has decided to suspend trading for USDT, DAI, and RAI stablecoins for its vast Canadian user base starting September 2023.
The Logic Behind the Strategy
Coinbase’s decision is rooted in its dedication to maintaining transparency and strict regulatory adherence. They periodically undertake evaluations of assets to determine their compliance with the platform’s high listing standards. While trading for these stablecoins is set to stop, Canadian customers are not left in a lurch – they retain the ability to deposit and withdraw these stablecoins up until the set deadline.
Crypto.com’s Similar Stance
Coinbase isn’t alone in its reshuffling of stablecoin offerings. Crypto.com, another titan in the crypto exchange domain, has also delisted USDT for its users in Canada. This decision aligns with the Ontario Securities Commission’s earlier move in 2021 to prohibit USDT trading. Yet, the layers of this decision are manifold, with the specific reasons for this ban still shrouded in mystery.
Canada’s Evolving Crypto Regulatory Framework
Canada’s proactive approach to crypto regulation is evident. The Canadian Securities Administrators (CSA) have put forth a clear stance on their expectations from crypto exchanges. A notice they released on Feb. 22 clearly dictates that all crypto exchanges, regardless of whether they are registered or in the process, need to have legally binding agreements with regulatory oversight bodies.
Diving Deeper into Stablecoin Mechanics
Stablecoins have been lauded for their relative stability in the often tumultuous crypto market. USDT, for example, maintains a 1:1 relationship with the US Dollar. DAI presents a unique approach by amalgamating properties of both fiat-backed and algorithmic stablecoins. RAI, however, stands distinct as a purely algorithmic stablecoin, devoid of any specific asset connection.
USDC’s Continued Presence
Amid these shifting sands, Canadian crypto enthusiasts have a beacon of hope. Presently, USDC stands tall as the only stablecoin that has received the CSA’s blessing, allowing it to be traded on centralized crypto exchanges within Canadian borders.