The Canadian Office of the Superintendent of Financial Institutions (OSFI) has put forward a proposal for new regulations targeting banks, insurers, and other entities operating within the financial markets that hold cryptocurrencies on their balance sheets. Starting from 2025, there will be an increase of half a percentage point in the capital reserve requirement. This enhancement in the minimum capital reserve is intended to bolster the stability of the Canadian financial sector, which is becoming increasingly interconnected with the world of cryptocurrency assets.

According to the Canadian OSFI, it is imperative for banks and insurers to adhere to clear guidelines regarding the management of cryptocurrency assets due to the growing volume they hold in their portfolios.

Cryptocurrency assets are regarded as highly risky, with the potential to transmit a crisis to the traditional financial market, thereby impacting conventional financial institutions.

The new regulations proposed by OSFI will not only apply to banks and insurers, but also extend to other companies that receive funds or payments from their clients, whether for saving, investing, or loan financing purposes.

Among the proposed measures is an increase in the minimum capital reserve by half a percentage point to 3.5 percent.

The new regulations are expected to take effect no later than 2025, subject to approval by the legislative body.

Prior to the lawmakers’ vote, there will be a public debate, set to commence in September of this year, as reported by Reuters citing OSFI.

Source: Balu – Reuters