Canada’s financial watchdog is proposing changes to its capital and liquidity approach to crypto assets, according to an announcement on July 26. According to the Office of the Superintendent of Financial Institutions (OSFI), the proposed rules will simplify institutions’ approach to perceived crypto risks, defining four categories of crypto assets and their capital treatment.
OSFI is opening public consultations on two draft guidelines until Sept. 20. One of the guidelines affects federally regulated deposit-taking institutions, such as banks and credit unions, while another addresses the regulatory capital treatment of crypto-asset exposure for insurers.
“Deposit-taking institutions and insurers need clarity on how to treat crypto-asset exposures when it comes to capital and liquidity. We look forward to giving them this clarity through these new guidelines that reflect industry input and international standards,” said OSFI Superintendent Peter Routledge.
In line with @BIS_org’s new banking standards for #crypto-asset exposures, we’ve drafted guidance tailored for Canada.
— Superintendent of Financial Institutions (@OSFICanada) July 26, 2023
The new rules seek to reflect an “evolving risk environment,” notes the regulator. The rules also address changes introduced by the Basel Committee in December 2022 outlining new banking standards for crypto-asset exposure, with implementation set for Jan. 1, 2025. The Basel Committee’s new standards include rules related to tokenized traditional assets, stablecoins and unbacked crypto assets.
The OSFI says its drafts incorporate the new international banking standards, while the insurance guidelines are adjusted to meet the specific needs of the local insurance industry.
The new guidelines will also replace an existing advisory published in August 2022 that defined and categorized crypto-asset exposure and its potential risks for financial institutions.
Canada’s evolving regulatory landscape comes amid growing concerns about the ramifications of digital assets on banking systems worldwide. In the United States, crypto-friendly banks such as Silvergate and Signature Bank shut down operations amid liquidity issues stemming from crypto-related events in 2022.
Canterbury MP Rosie Duffield has resigned from the Labour Party.
The 53-year-old MP is the first to jump ship since the general election and in her resignation letter criticised the prime minister for accepting thousands of pounds worth of gifts.
She told Sir Keir Starmer the reason for leaving now is “the programme of policies you seem determined to stick to”, despite their unpopularity with the electorate and MPs.
In her letter she accused the prime minister and his top team of “sleaze, nepotism and apparent avarice” which are “off the scale”.
“I’m so ashamed of what you and your inner circle have done to tarnish and humiliate our once proud party,” she said.
Since December 2019, the prime minister received £107,145 in gifts, benefits, and hospitality – a specific category in parliament’s register of MPs’ interests.
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Ms Duffield, who has previously clashed with the prime minister on gender issues, attacked the government for pursuing “cruel and unnecessary” policies as she resigned the Labour whip.
She criticised the decision to keep the two-child benefit cap and means-test the winter fuel payment, and accused the prime minister of “hypocrisy” over his acceptance of free gifts from donors.
“Since the change of government in July, the revelations of hypocrisy have been staggering and increasingly outrageous,” she said.
“I cannot put into words how angry I and my colleagues are at your total lack of understanding about how you have made us all appear.”
Ms Duffield also mentioned the recent “treatment of Diane Abbott”, who said she thought she had been barred from standing by Labour ahead of the general election, before Sir Keir said she would be allowed to defend her Hackney North and Stoke Newington seat for the party.
Her relationship with the Labour leadership has long been strained and her decision to quit the party comes after seven other Labour MPs were suspended for rebelling by voting for a motion calling for the two-child benefit cap to be abolished.
“Someone with far-above-average wealth choosing to keep the Conservatives’ two-child limit to benefit payments which entrenches children in poverty, while inexplicably accepting expensive personal gifts of designer suits and glasses costing more than most of those people can grasp – this is entirely undeserving of holding the title of Labour prime minister,” she said.
Ms Duffield said she will continue to represent her constituents as an independent MP, “guided by my core Labour values”.