Canadaโs 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 in the 2023 federal budget, but its timing is tied to a similar enquiry initiated by the Bank for International Settlements (BIS).
The Canadian government stated in March that it would draw up crypto exposure guidelines for banks โto help protect Canadians’ savings and the security of our financial sector.โ The provision is found in section 5.4 of the budget, titled โCombatting Financial Crime.โ The budget also stated that federally regulated pension funds will be required to disclose their crypto exposure to the OSFI โ no consultation is required.
[Have your say]
Weโre gathering input on public disclosure of #crypto-asset exposures by banks and insurers in #Canada.For more details and to share your feedback, visit: https://t.co/ldCdzW56PP pic.twitter.com/7O4ECxAEle
โ Superintendent of Financial Institutions (@OSFICanada) November 20, 2023
Canadian pension funds had a painful experience with crypto in 2022. The Caisse de dรฉpรดt et placement du Quรฉbec, Canadaโs second-largest pension fund, lost CA$200 million ($154.7 million) in the Celsius bankruptcy. The Ontario Teachersโ Pension Plan wrote off $95 million in FTX and FTX.US investment in November 2022 and stated in April that it was swearing off crypto for good. CPP Investments, Canadaโs 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 banksโ crypto asset exposure in October. Commenters can โprovide feedback on BCBS proposals, ensuring guidelines align with the Canadian context,โ the OSFI said. In its consultation, the OSFI specifically asks for commenters to appraise and enhance the BCBS disclosure framework. Responses are due by January 31, 2024.
The OSFI concluded a consultation on liquidity requirements for banks with crypto assets in September. It too was coordinated with a BIS consultation.
