The Office of the Superintendent of Financial Institutions (OSFI) raised the amount of exposure to bitcoin, ether and other unbacked crypto assets banks can have up to five per cent of their high-quality capital, up from one per cent. (The Logic)

Talking point: The financial system and crypto markets are becoming increasingly entangled, making it harder for regulators to ring fence banks from the risk and volatility that are hallmarks of the digital asset world. OSFI released an FAQ that highlights this challenge, saying it includes both direct ownership and indirect vulnerability to any instrument whose value is “significantly determined” by the crypto market in its definition of “exposure.” OSFI also said it’s considering letting banks accept certain crypto assets as collateral, which could pave the way for bitcoin-backed lending—a business Alberta’s ATB Financial has expressed interest in.