JAKARTA - Canada's financial supervisory authority, the Office of the Superintendent of Financial Institutions (OSFI), is proposing changes to its capital and liquidity approach related to crypto assets, as announced on July 26. According to the OSFI, the proposed rules will simplify financial institution's approach to the risk of crypto assets deemed risky, by determining the four categories of crypto assets and appropriate capital treatment.
OSFI opens public consultations for two guidance plans until September 20. One guide affects deposit collection institutions regulated by the federal government, such as banks and credit cooperatives, while the other regulates regulatory capital treatment for crypto asset exposure for insurance companies.
"The collection of deposits and insurance companies requires clarity on how to deal with crypto asset exposure related to capital and liquidity. We hope to provide this clarity through new guidelines that reflect international industry input and standards," said OSFI Superintendent Peter Routledge.
The new rules aim to reflect a growing "environment of risk," regulators noted. These rules also address the changes introduced by the Basel Committee in December 2022 outlining new banking standards for crypto asset exposure, with implementations scheduled to start January 1, 2025. The new standards from the Basel Committee include rules related to traditional tokenized assets, stablecoins, and crypto assets without real asset support.
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Ad OSFI said that their draft guide combines the new international banking standards, while insurance guidelines are adjusted to meet the special needs of the local insurance industry.
This new guide will also replace existing advisory guidelines published in August 2022 that define and categorize crypto asset exposure and its potential risk to financial institutions.
Canada's growing regulatory landscape comes amid growing concerns about the impact of digital assets on banking systems around the world.
In the United States, crypto-friendly banks, such as Silvergate and Signature Bank, closed their operations due to liquidity issues stemming from crypto-related events in 2022.
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