While many countries are regulating cryptocurrencies, one of these countries was Canada.
At this point, the Canadian Financial Institutions Inspectorate (OSFI) made new recommendations regarding cryptocurrencies.
At this point, OSFI has proposed new strict rules for cryptocurrency exposure of the banking and insurance industry.
Underlining that banks and insurance institutions should be mindful of the risks involved in investing in cryptocurrencies, OSFI said the new rules “reflect an evolving risk landscape and international developments”.
In its proposal, OSFI stated that cryptocurrencies should be divided into two broad groups.
“Cryptocurrencies need to be divided into two groups. One of these groups is tokenized traditional assets and stablecoins, and the second is unsupported cryptocurrencies.
And banks are required to have an exposure cap of no more than 1% for unsupported crypto assets.”
“Bankers and insurers need clarity on how to address cryptocurrency risks when it comes to capital and liquidity. We look forward to giving them the clarity they want with these guidelines,” said OSFI Chief Superintendent Peter Routledge. said.
OSFI said that the recently proposed rules also address new banking standards changes introduced by the Basel Committee in December 2022, which stipulate the disclosure of cryptocurrencies.
*Not investment advice.