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Canada's financial regulator, the Office of the Superintendent of Financial Institutions (OSFI), today proposed an update to its existing capital and liquidity take on cryptocurrencies.
The OSFI announced separate draft guidelines for registered institutions that accept deposits, which include banks and another for institutions offering insurance, on the capital treatment of crypto exposure. The agency justified that the changes “reflect an evolving risk environment and international developments” in a Wednesday announcement.
“Deposit-taking institutions and insurers need clarity on how to treat crypto-asset exposures when it comes to capital and liquidity. We look forward to giving them this clarity through these new guidelines that reflect industry input and international standards.” Peter Routledge, Superintendent of Financial Institutions, said.
The banking proposal reflects the December 2022 Basel Committee on Banking Supervision (BCBS) merits. The insurance guidelines similarly incorporate the relevant elements of the BCBS standard with changes to accommodate the local insurance industry. Both guidelines in the new bank capital rules for crypto holdings detail four classifications of cryptocurrencies and the capital treatment for each.
The public consultations on two draft guidelines for banks and insurers will be open until Sept 20. If approved, the guidelines will be implemented in early 2025 to replace the in-effect interim advisory on the regulatory treatment of crypto exposure introduced last August.