Canadian Banks Get New Crypto Rules
New rules for banks and insurers are based on Basel Committee guidelines
The rules, which take effect in January 2023, limit the exposure of banks and insurers to crypto assets to 1% of their Tier 1 capital.
The Office of the Superintendent of Financial Institutions (OSFI) announced the new rules on Thursday, making Canada the first country to issue comprehensive crypto regulations for banks.
The rules are based on guidelines from the Basel Committee on Banking Supervision, which is an international body that sets standards for the regulation of banks. The Basel Committee guidelines were published in June 2021 and have been criticized by some for being too conservative.
OSFI said the new rules are designed to "mitigate the risks associated with crypto assets while allowing banks and insurers to continue to innovate in this rapidly evolving space."
The rules will apply to all banks and insurers that are regulated by OSFI. This includes all of Canada's major banks, as well as some smaller banks and credit unions.
The rules will require banks and insurers to hold capital against their crypto asset exposures. The amount of capital that is required will depend on the riskiness of the crypto asset.
The rules will also prohibit banks and insurers from lending to customers who use crypto assets as collateral.
The new rules are a significant step forward for the regulation of crypto assets in Canada. They provide much-needed clarity for banks and insurers and will help to protect consumers.
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