Bank of Russia Proposes 1% Capital Cap on Crypto Exposure for Banks

The central bank of Russia has issued draft prudential rules that would cap the aggregate crypto‑related risk of banks at 1% of their own funds. The proposal covers a wide range of digital‑asset exposures, from direct holdings to derivatives and linked financing instruments.

Scope of the proposed limits

Under the draft, banks must calculate exposure to cryptocurrencies and foreign digital instruments across several product types, including:

• Direct crypto holdings
• Loans, credit lines and guarantees settled in digital assets
• Derivatives, bonds and repo transactions whose value depends on crypto or foreign digital instruments

Two risk ratios – N31 for individual credit institutions and N32 for consolidated banking groups – would each be limited to 1% of the institution’s own funds, with daily compliance required.

Risk‑weighting framework

Crypto exposures are divided into two groups:

1. Group 1 – lower‑risk positions such as certain cash‑settled exchange‑traded derivatives, qualifying OTC derivatives, and instruments settled in rubles or non‑unfriendly currencies. Offsetting long and short positions is allowed, with maturity‑mismatch discounts ranging from 5% to 85%.
2. Group 2 – higher‑risk items including direct crypto investments, loans settled exclusively in digital assets, and non‑qualifying derivatives. Offsetting is not permitted; the larger of the long or short position is used for the risk calculation.

Both groups would be assigned a 1,250% risk weight for capital adequacy, while certain client positions that do not place loss responsibility on the bank would receive a 50% risk weight. Crypto‑linked derivatives would carry a 36% risk factor.

Compliance and enforcement

Banks must report turnover in the covered instruments and the N31/N32 ratios starting January 2027. Breaches on six or more days within any 30‑day window would trigger supervisory action. The rules are slated for official publication in Q4 2026 and would become effective 10 days after publication.

Context within Russia’s regulated crypto market

The proposal follows the launch of Russia’s regulated cryptocurrency framework on 1 September 2023, which introduced licensing for exchanges, custodians and cross‑border operators. Non‑qualified investors are limited to purchasing up to 300,000 rubles of eligible liquid cryptocurrencies per year, while qualified investors face fewer purchase caps but must pass suitability tests.

Major banks are preparing infrastructure to serve the market: Sberbank targets a December 1 launch of a full crypto‑trading and custody platform, and Alfa Bank is piloting crypto trading for qualified clients.