The Office of the Superintendent of Financial Institutions (OSFI) has proposed changes to the capital and liquidity approach for crypto-assets. This proposal reflects the evolving risk environment and international developments, according to the Canadian regulator.
OSFI introduced two draft guidelines: one for federally regulated deposit-taking institutions and another for insurers. These guidelines are based on the regulatory capital treatment of crypto-asset exposures.
These guidelines from OSFI align with the new banking standards for crypto-asset exposures published by the Basel Committee on Banking Supervision in December 2022.
However, OSFI is seeking public input and will keep the two draft guidelines open for consultation until September 20, 2023. Comments can be submitted to the regulator via email at consultations@osfi-bsif.gc.ca.
Further, the guidelines by OSFI coming into effect in 2025 will replace the interim advisory on the regulatory treatment of crypto-asset exposures published earlier in August 2022.
Deposit-taking institutions and insurers need clarity on how to treat crypto-asset exposures in terms of capital and liquidity. We look forward to providing them with this clarity through these new guidelines that reflect industry input and international standards.”
Speaking about the OSFI proposal, Peter Routledge, Superintendent of Financial Institutions, said that clarity on capital and liquidity for crypto asset exposures is important. “We look forward to providing them with this clarity through these new guidelines that reflect industry input and international standards,” he added.
Moreover, the new guidelines aim to offer a simplified and comprehensive approach to crypto-assets. The guidelines contain four different classifications of crypto-assets and provide the capital treatment for each classification.
According to the OSFI release on the guidelines, “the insurance guideline incorporates the relevant parts of the BCBS standard with adjustments to meet the specific context of the insurance industry.” Additionally, the regulator stated that the earlier August 2022 interim advisory remains valid and in effect for now.
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