The Consultation starts on April 17 with the objective to gather feedback on mitigating the risks associated with single fiat-referenced cryptoassets arrangements and activities.
The Office of Superintendent Financial Institutions (OSFI) defined fiat-referenced cryptoassets as : “cryptoassets that are pegged to a single fiat currency and backed at least one-for-one by cash and cash equivalents, or issued as a liability of a financial institution”.
OSFI is seeking views on the Financial Stability Board (FSB) High Level Recommendations on the Regulation, Supervision and Oversight of “Global Stablecoin” Arrangements which recommends that entities engaging in fiat-referenced cryptoasset arrangements or activities should be subject to comprehensive supervision and regulation.
Comments should be provided on the following:
Governance and risk management framework (e.g. management of material risks, establishment of contingency arrangements, AML/CTF measures, management of operational, reputational, and financial risks t…).
Redemption rights, stabilization mechanism, and prudential requirements (e.g. Appropriate infrastructures, processes, and procedures are maintained to ensure data quality and reliability; data management systems that record and safeguard relevant data and information collected and produced…).
Custody and digital wallet services (i.e. custodial service or digital wallet operations risk; third-party risk and third-party concentration risk).
Trading, transfer, and transaction validation (Network capacity risk,Product risk…)
Transversal risks that may affect all of the aforementioned activities (e.g. operational risk; technology risk; compliance risk; conflicts of interest;breach to data confidentiality and privacy; legal risk; reputational risk…).
OSFI will consider feedback to align its future risk management expectations with related international recommendations.
The comment period will close on June 16, 2023.