OSFI Introduces Rules for Canadian Banks to Manage Exposure in Cryptocurrency
The Office of Superintendent of Financial Institutions (OSFI), Canada’s banking regulator, has recently announced new guidelines for banks to manage their exposure in cryptocurrency. This move comes as interest in digital assets continues to grow in the country.
The final guidelines were unveiled in the regulator’s quarterly report, along with a consultation on capital requirements. This shift in regulatory approach aligns with the increasing adoption of digital assets and aims to enhance financial stability in the Canadian banking sector.
As reported by the Globe and Mail, the OSFI has been assessing how Canadian banks handle risks associated with crypto-assets, including platforms and currencies like Bitcoin, within their client portfolios. The new regulations require banks to evaluate both direct exposure to crypto on their balance sheets and asset exposures among their customers.
Growing Adoption of Digital Assets in Canada
Recent data from the Bank of Canada shows a significant increase in the number of Canadians owning Bitcoin, with a jump from 5% in 2018 to 13% in 2021. This surge in ownership, predominantly among men, highlights the growing interest in digital assets within the country.
While the OSFI acknowledges that the current risk level is relatively low, the rapid growth in crypto activity necessitates enhanced oversight. Assistant Superintendent and Chief Strategy and Risk Officer, Angie Radiskovic, emphasized the need for increased vigilance in light of the escalating adoption of digital assets.
“We’re witnessing a substantial uptick in the crypto market,” stated Ms. Radiskovic during a recent conference call with reporters.