Industry players have until September 20th to voice their opinions on the newly proposed guidelines.
To adjust to the dynamic environment of crypto assets, Canada's Office of the Superintendent of Financial Institutions (OSFI) issued a proposal on July 26th outlining modifications to its capital and liquidity rules linked to crypto.
Under the new proposal, the OSFI aims to streamline the approach of financial institutions' handling of potential risks associated with crypto assets.
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The proposed changes entail the classification of crypto assets into four distinct categories, each with its corresponding capital treatment.
OSFI introduced two draft guidelines, one aimed at federally governed institutions that accept deposits and another focusing on the capital regulation of insurers' exposure to crypto assets.
OSFI Superintendent Peter Routledge emphasized the need for clear regulations on handling crypto assets concerning capital and liquidity by deposit-taking institutions and insurers. On top of that, Routledge noted:
We look forward to giving them this clarity through these new guidelines that reflect industry input and international standards.
In its bid to stay abreast of an "evolving risk environment," OSFI is also incorporating changes proposed by the Basel Committee in December 2022. The modifications, which address crypto-asset exposure and establish new banking standards, are scheduled for implementation on January 1st, 2025.
To ensure wide participation and feedback, the OSFI has opened a consultation window until September 20th.
The move by the OSFI comes at a time of increased scrutiny on the potential impacts of digital assets on global banking systems. Cases in point include US-based crypto-friendly banks Silvergate and Signature Bank, which ceased operations due to liquidity issues triggered by crypto-related events in 2022.
