Leading Singaporean cryptocurrency exchange Crypto.com said that it would officially remove USDT stablecoin for Canadian users on January 31 at 1 p.m. ET.
Informing customers via email, the top exchange said all USDT trading pairs, transactions, deposits, and withdrawals would be removed from the exchange at that moment, and all USDT deposits made by users after that point would be converted to USDC issued by Circle.
The current move coincides with regulators tightening the noose on centralized exchanges globally as a result of the failure of FTX and increasing competition among the top stablecoins.
One of them is Canada’s top regulatory body, the Canadian Securities Administrators [CSA], which stated last month it would increase its monitoring of cryptocurrency exchanges by “expanding existing requirements” for trading platforms operating in the country.
The CSA, in particular, put emphasis on stablecoin saying it “continues to monitor and assess the presence and role of these asset classes in Canadian capital markets,” according to a press release.
CSA regulators also issued a warning to crypto exchanges not to allow any cryptocurrency that may be considered security — a designation that the regulators say could include stablecoins.
“The CSA is of the view that stablecoins, or stablecoin arrangements, may constitute securities and/or derivatives,” the group said. To evaluate if the digital assets they list are securities or derivatives, crypto exchanges must have developed policies and procedures.
Although a specific date for the new rules’ implementation is not yet known, platforms can anticipate being approached individually to talk about them. An inquiry for comment was not immediately answered by the CSA.
That said, in Sept. 2021, the Ontario Securities Commission [OSC], Canada’s top financial watchdog, banned trading platforms operating locally from interacting with the market-leading stablecoin tether even though it hasn’t made it clear if it considers USDT a security.
Tether’s USDT Has Faced A Rise In Competitors
Following the FTX’s saga, Tether has faced intense regulatory scrutiny throughout 2022 and expressed a desire to increase transparency on its collateral reserves.
The collapse of the SBF’s crypto empire was bittersweet for the largest stablecoin in the world because the exchange platform was Tether’s biggest user.
Competition for Tether’s USDT position as the biggest stablecoin in the cryptocurrency ecosystem has increased as a result. Wall Street firms like BlackRock and BNY Mellon prefer USD Coin [USDC], which has a 29.8% market share in stablecoins.
It also faces extensive competition from Binance’s stablecoin BUSD.