On Wednesday, Canada’s financial regulator proposed changes to its capital and liquidity approach to crypto assets, which can cause a risky environment in response to international banking standards.
The Office of the Superintendent of Financial Institutions (OSFI) said procedures were for federally regulated deposit-taking institutions, that includes banks and credit unions, and another for insurers, on the regulatory capital treatment of crypto-asset exposures.
OSFI’s Superintendent Peter Routledge said banks and insurers need transparency on how to treat crypto-asset vulnerability when it comes to capital and liquidity. The regulator looks to provide clarity through the new guidelines.
The two draft guidelines will be open for public consultation till Sept. 20 and the results are expected in early 2025.
The new guidelines will replace the provisional advisory on the regulatory treatment of crypto-asset exposures, published in August 2022, as stated by OSFI.
In June, the regulator raised the amount of capital which the country’s biggest lenders must hold as a stability buffer by 50 basis points to 3.5%, citing rising borrowing costs, high debt levels and stress on the financial system.
