The US-based crypto exchange Coinbase has announced the removal of three stablecoins from its offerings for Canadian customers, shortly after its debut in the nation.

Coinbase Announces Removal of RAI, DAI, USDT

In a communication to its users, Coinbase conveyed that Canadian customers would not have access to trade stablecoins RAI, DAI, and USDT by the end of August. The decision stems from these stablecoins not adhering to the platform’s listing criteria.

Coinbase stated, “After thorough evaluation, we’ve decided to halt trading of RAI Reflex Index (RAI), Dai (DAI), and Tether (USDT) in Canada by August 31, 2023, at 12pm ET.” While trading will be suspended, users can continue to manage deposits and withdrawals for these stablecoins.

While Coinbase attributes the decision to the stablecoins not meeting their standards, there’s speculation that regulatory pressures from Canadian authorities might have played a role.

In the previous year, the Canadian Securities Administrators (CSA) emphasized that certain stablecoins could be classified as securities. They cautioned crypto platforms in Canada about offering these stablecoins to local users. This has led to speculation that the CSA might have influenced Coinbase’s decision, especially since they view these stablecoins as “securities.”

Interestingly, Coinbase has not taken any action against its stablecoin USDC, which competes closely with USDT in terms of market capitalization.

Coinbase’s Registration Status in Canada

Coinbase marked its official entry into Canada on August 14. However, the email suggests that the platform hasn’t secured full registration in the country. Coinbase mentioned that they’ve applied to operate in specific Canadian regions but are awaiting approval. In the meantime, they’ll adhere to the pre-registration undertaking (PRU) agreement they entered into in March.

The CSA had previously stated that crypto platforms in Canada should “commit to a pre-registration undertaking with their primary regulator to continue operations during the application review process.” These platforms must comply with the guidelines set for registered platforms during this interim period.

Should Coinbase secure the necessary approvals, it could potentially dominate the Canadian crypto market, especially with Binance, the global leader in crypto trading volume, exiting the Canadian market in May due to tightened crypto regulations.