Canada’s Office of the Superintendent of Financial Institutions (OSFI) has opened a consultation period on crypto asset disclosure requirements for federally regulated financial institutions (FRFIs). The consultation was foreseen on the 2023 federal budget, but its timing was tied to a similar question initiated by the Bank for International Settlements (BIS).
The Canadian government said in March it would develop crypto exposure guidelines for banks “to help protect the savings of Canadians and the security of our financial sector.” The provision appears in section 5.4 of the budget, titled “Combating Financial Crime.” The budget also states that federally regulated pension funds must disclose their crypto exposure to OSFI – no consultation required.
For more details and to share your feedback, visit: https://t.co/ldCdzW56PP pic.twitter.com/7O4ECxAEle
— Superintendent of Financial Institutions (@OSFICanada) November 20, 2023
Canadian pension funds will have a painful experience with crypto in 2022. The Caisse de dépôt et placement du Québec, the second largest pension fund in Canada, lost CA $ 200 million ($154.7 million) in the bankruptcy of Celsius. The Ontario Teachers’ Pension Plan wrote off $95 million in FTX and FTX.US investments by November 2022 and announced in April that it was swearing off crypto for good. CPP Investments, Canada’s largest pension fund, canceled all crypto research in December.
Related: Canadian regulatory body clarifies stablecoin rules for exchanges and issuers
The Basel Committee on Banking Supervision (BCBS) announced its consultation on crypto asset exposure in banks last October. Commenters can “provide feedback on the BCBS proposals, ensuring that the guidelines are consistent with the Canadian context,” OSFI said. In its consultation, OSFI specifically requested for commenters to evaluate and improve the BCBS disclosure framework. Answers are due by January 31, 2024.
OSFI concluded a consultation on liquidity requirements for banks with crypto assets in September. It is also coordinated with a BIS consultation.
Magazine: Your guide to crypto in Toronto: Crypto City