Canadian regulators launched a consultation today asking for feedback in regards to public disclosure of crypto assets from federally regulated financial institutions (FRFIs).
Digital innovation internationally
“Digital innovation is transforming how we transact, manage money, and view value but poses risks to our financial system,” read a statement from the Office of the Superintendent of Financial Institutions (OSFI). “Recent crypto events underscore risks of unregulated financial innovation. Public disclosures enhance transparency, comparability of data, and market discipline for a safer financial system.”
Originally announced in Canada’s federal budget in March 2023, the OSFI’s consultation runs parallel to one launched on October 17th, 2023 by the Basel Committee on Banking Supervision.
Comprised of over 45 members from 28 jurisdictions, the Basel Committee on Banking Supervision is an international standard for bank regulation and a forum for banking supervisory matters. The Basel Committee on Banking Supervision’s proposed regulations would require banks and other financial institutions to provide both quantitative and qualitative data related to their crypto assets in the hopes of providing greater transparency and accountability to the industry.
“Ongoing turbulence in crypto-asset markets”
The launch of OSFI’s consultation comes amidst a wave of regulation in the United States following the collapse of enterprises such as Signature Bank and crypto exchange FTX.
Earlier this month, a jury found FTX founder Sam Bankman-Fried guilty on seven different fraud charges. In the weeks following his conviction, the U.S. Senate and House of Representatives have held several hearings in regard to issues surrounding cryptocurrency.
“Ongoing turbulence in crypto-asset markets, and the recent high-profile failures of crypto trading platform FTX, and of Signature Bank, have demonstrated that crypto-assets can threaten the financial well-being of people, national security, and the stability and integrity of the global financial system,” the 2023 Canadian federal budget reads in part.
A $1.2 trillion market
Between July 2022 and July 2023, the North American crypto market brought in an estimated $1.2 trillion, representing nearly a quarter of all transactions worldwide.
Most recently, Coinbase officially launched into the Canadian market in August, with the company calling the country “the third most crypto-aware nation” in the world.
“Public disclosures are crucial for managing risks in banks and insurers, especially regarding crypto-asset exposures,” said Peter Routledge, Superintendent of Financial Institutions. “We welcome feedback to tailor disclosure expectations to the Canadian context.”
The OSFI’s guidelines which launch by fall 2024 at the latest. Those who wish to provide feedback have until January 31st, 2024 to do so.
This post first appeared on: Crypto News