Crypto.com Delists USDT in Canada Amid Regulatory Changes

Crypto.com Delists USDT for Canadian Users

Crypto.com, a global cryptocurrency exchange, will cease offering the Tether-issued stablecoin USDT to Canadian users starting January 31st. This decision follows directives from the Ontario Securities Commission (OSC) as part of Crypto.com's pre-registration undertaking for a restricted dealer license. All USDT trading pairs, transactions, deposits, and withdrawals will be removed from the platform. Remaining USDT deposits will be automatically converted to Circle-issued USDC.

Regulatory Influence on Stablecoins

The Canadian Securities Administrators (CSA) have announced plans to enhance their oversight of cryptocurrency trading platforms. The CSA intends to examine the regulatory implications of stablecoins within capital markets, aligning with its 2022-2025 Business Plan. This regulatory shift is partly in response to the recent collapse of major crypto platforms like FTX, prompting a more cautious approach by Canadian regulators.

USDT Faces Growing Challenges

Tether's USDT, once a dominant stablecoin, is now facing increased competition. Rival USDC has gained favor among crypto users, especially following FTX's collapse. On-chain data indicates that USDC has been averaging significantly higher transfer volumes than USDT. This shift is attributed to criticisms of USDT's auditing practices and transparency regarding its reserves.

Comparative Market Performance

Despite current challenges, USDT remains the largest stablecoin, boasting a market cap of $66 billion, surpassing USDC by $23 billion. Nonetheless, the intensified scrutiny and competition in the stablecoin market have prompted exchanges like Crypto.com to reevaluate their offerings to align with regulatory expectations.

Crypto.com's decision reflects broader efforts by Canadian authorities to impose stricter regulations on centralized exchanges, ensuring greater market stability and transparency.