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Banks’ Crypto Exposure Capped by Canadian Regulator in New Rules

  • New OSFI guidance appears to encompass most cryptocurrencies
  • Rules to come into effect in the second quarter of 2023
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Canadian banks and insurers must limit their exposure to crypto assets to a small fraction of their capital under new interim rules from the country’s financial regulator.

Financial firms need to notify the Office of the Superintendent of Financial Institutions if their gross exposure to type 2 crypto assets -- which, under the regulator’s definition, would likely encompass most cryptocurrencies -- exceeds 1% of their Tier 1 capital, the regulator said Thursday.