Canada Seeks Feedback on Crypto Asset Disclosure
Canada’s Office of the Superintendent of Financial Institutions (OSFI) has launched a consultation period to gather public input on crypto asset disclosure requirements for federally regulated financial institutions (FRFIs). This consultation was included in the 2023 federal budget and is tied to a similar inquiry by the Bank for International Settlements (BIS).
In March, the Canadian government announced its intention to establish guidelines for crypto exposure among banks as a means of protecting Canadians’ savings and the financial sector’s security. The consultation is outlined in section 5.4 of the budget, focused on “Combatting Financial Crime.” Additionally, federally regulated pension funds will be mandated to disclose their crypto exposure to OSFI, without the need for consultation.
Canadian Pension Funds Grapple with Cryptocurrency
During 2022, Canadian pension funds faced significant losses related to cryptocurrency. The Caisse de dépôt et placement du Québec, Canada’s second-largest pension fund, experienced a loss of CA$200 million ($154.7 million) due to the Celsius bankruptcy. Similarly, the Ontario Teachers’ Pension Plan wrote off $95 million in FTX and FTX.US investments in November 2022, subsequently declaring to abstain from further crypto investments. Canada’s largest pension fund, CPP Investments, also abandoned all crypto research in December.
Hot Take: Regulation Impact on Crypto Holdings
Canada’s move to seek feedback on crypto asset disclosure requirements showcases a growing trend of regulatory oversight in the cryptocurrency space. As pension funds and financial institutions face increasing scrutiny and requirements for disclosure, the impact on crypto holdings and investment strategies is likely to evolve. It will be crucial for stakeholders to stay informed and adapt to the changing regulatory landscape to navigate the complexities of managing crypto assets within a regulated environment.
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