• The Canadian federal government has proposed a budget for the year 2023 that would require federally regulated pension plans to report their exposure to crypto-assets to OSFI.
• This is meant to help protect Canadians’ retirements and address consumer protection gaps and threats to the financial system.
• Provinces and territories will collaborate with the federal government in order to ensure that pension plan holders are informed of their investment in cryptocurrencies.
Canadian Federal Government’s Proposed Budget
The Canadian federal government has proposed a budget for the year 2023 which would compel federally regulated pension plans to reveal their exposure to crypto-assets, such as Bitcoin, Ethereum, and other digital currencies, to the Office of the Superintendent of Financial Institutions (OSFI). The aim behind this move is to help protect Canadians‘ retirement savings and address consumer protection gaps and threats posed by crypto-assets.
Collaboration with Provinces & Territories
In order for Canadians to be informed of any potential investments they may have in cryptocurrencies, the federal government will collaborate with provinces and territories across Canada. This collaboration will ensure that all pension plan holders are aware of their investments in crypto-assets.
High Profile Bankruptcies & Losses
The decision comes after numerous high-profile bankruptcies revealed the significant volatility investors confront when dealing with cryptocurrency assets. Examples include FTX exchange, Silvergate Bank and Signature Bank who all suffered financial losses due to investing in digital assets. Additionally, Caisse de Depot et Placement du Québec reported losing US$150 million on a stake in Celsius Network while Ontario Teachers‘ Pension Plan reported writing down its entire US$95 million stake in FTX.
Protecting Consumers from Risks
In light of these occurrences, there is an urgent need for various tiers of government across Canada to actively work together towards protecting consumers from risks associated with digital currency investments. By requiring federally regulated pension plans declare their exposure or related activity involving crypto-assets, consumers can make better decisions regarding where they choose invest their money.
Conclusion
The proposed 2023 budget aims at helping protect Canadians‘ retirements by making sure they are aware of any potential investments they may have in cryptocurrencies through their pension plans by requiring federally regulated pensions plans declare their exposure or related activity involving these assets.