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The Office of the Superintendent of Financial Institutions (OSFI) in Canada has put forth proposed changes to its capital and liquidity approach concerning crypto-assets, citing the risks associated with the crypto environment and in alignment with international banking standards.
The guidelines are aimed at federally regulated deposit-taking institutions, including banks and credit unions, as well as insurers, and focus on the regulatory capital treatment of crypto-asset exposures.
According to OSFI’s Superintendent Peter Routledge, banks and insurers require clarity on how to handle crypto-asset exposures concerning capital and liquidity. The regulator aims to address this need through the implementation of the new guidelines.
Both draft guidelines will be open for public consultation until September 20, with the expected implementation set for early 2025.
These new guidelines will replace the interim advisory on the regulatory treatment of crypto-asset exposures published in August 2022, as stated by OSFI.
In a separate move, in June, the regulator raised the capital requirement for the country’s major lenders by 50 basis points, bringing the stability buffer to 3.5%. This decision was made in response to increasing borrowing costs, high debt levels, and stress on the financial system.
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