The Canadian regulator has instructed banks to invest in cryptocurrencies.
Canada has joined European and US regulators with instructions on how regulated entities can interact with cryptocurrencies.
The Canadian Office of the Financial Institutions Inspectorate (OSFI), the country’s regulator of banks and insurance companies, has issued instructions on how much exposure organizations under its supervision should have to cryptocurrencies.
According to the published guide, OSFI classifies cryptocurrencies as Group 1 and Group 2. Group 1 represents traditional assets that provide various rights and obligations, while anything not included in this cluster is included in Group 2. OSFI is required to be notified if entities under the control of the regulator exceed 1% of their total gross positions and 0.1% of their total net open positions.
“The scope of this advisory is limited to the capital and liquidity of an FRFI’s exposure to crypto assets. Counseling does not address other issues, including whether an FRFI is permitted under the Bank Act, Insurance Companies Act, or Trust and Loan Companies Act.
This document sets out OSFI’s expectations regarding when FRFIs should notify their auditors if they plan to invest in cryptoassets.”
