Canada’s financial regulators have released a consultation document outlining capital plans for banks and insurers who hold crypto assets. The Office of the Superintendent of Financial Institutions (OSFI) said the proposals are based on those put forward by the Basel Committee on Banking Supervision in December.
Deposit-taking institutions and insurers need clarity on how to treat crypto-asset exposures when it comes to capital and liquidity, said Peter Routledge, Superintendent of Financial Institutions. We look forward to giving them this clarity through these new guidelines that reflect industry input and international standards.
The plans give banks the option of a more comprehensive formula which differentiates among crypto based on perceived risk, or a simpler but less discriminating option. The Basel Committee’s December proposal suggested that unbacked crypto should be treated as the riskiest kind of asset for banks to hold, with lenders limited in how much Bitcoin (BTC) or Ether (ETH) they can hold.
The consultation document is open until September 20th.