Canadian Crypto-Asset Disclosure: OSFI Invites Your Input

Canadian Crypto-Asset Disclosure: OSFI Invites Your Input
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A consultation on the public disclosure of cryptocurrency assets by federally regulated financial institutions (FRFIs) in Canada was started on November 20 by the Office of the Superintendent of Financial Institutions (OSFI).

The following three questions are being sought after by the Canadian regulator: What technical changes should be made to the BCBS disclosure tables and templates for banks and insurers operating in Canada, first?

Second, what important factors need to be taken into account to guarantee proportionate disclosures? Finally, what other factors brought up during the BCBS consultation should the OSFI take into account when creating Canadian disclosure standards?

Canadian Crypto-Asset Disclosure: OSFI Invites Your Input

A number of well-known cryptocurrency exchanges, like FTX, filed for bankruptcy and were entangled in scandal earlier this year.

A situation like this led regulators all around the world to scrutinize banks that deal with cryptocurrency holdings. In July 2023, OFSI put up new regulations on cryptocurrency assets in response.

According to OSFI, “Digital innovation is changing the way we handle money, transact, and perceive value, but it also presents hazards to our financial system.

Unregulated financial innovation carries hazards, as highlighted by recent crypto occurrences. Public disclosures improve market discipline, data comparability, and transparency for a safer financial system.”

The significance of public disclosures was emphasized by Peter Routledge, the Superintendent of Financial Institutions.

“Public disclosures are crucial for managing risks in banks and insurers, particularly with regard to exposures to crypto-assets,” he stated.

We are open to suggestions to modify our disclosure guidelines to the Canadian context.”

By autumn of the following year, the OSFI plans to make the draft guidelines on public disclosure available.

The crypto regulation is expected to go into effect in the fourth quarter of 2025, with final guidelines expected to be communicated by winter of that year.

A consultation from the Basel Committee on Banking Supervision (BCBS) will coexist with that from the OSFI.

The BCBS also released a consultation in mid-October about the disclosure of banks with global operations’ exposure to crypto assets.

The OSFI intends to use BCBS’s input to clarify what kind of public disclosure requirements are reasonable for Canadian banks and insurers.

Financial regulators are taking a proactive stance in tackling the risks related to the cryptocurrency industry, as evidenced by the OSFI’s consultation.

Additionally, it gives the nation’s banks a voice in how crypto-asset disclosure is developed in Canada going forward.

Disclaimer: The information provided in this article is for informational purposes only and should not be considered financial or investment advice. Always conduct your research before making any financial decisions.

Canadian Crypto-Asset Disclosure: OSFI Invites Your Input

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