Bank of Russia proposes 1% capital cap for banks’ crypto-asset exposure
The Bank of Russia on Sept. 18 released a draft proposal that would formalize how banks and banking groups measure exposure to crypto assets through two ratios, N31 and N32. The framework would calculate exposure against a single credit institution’s own funds and a banking group’s consolidated capital, respectively, while setting a 1% capital ceiling for such exposure. The draft says the scope would include direct investments, derivatives linked to crypto-asset prices, and loans, bonds, and repo transactions whose settlement or value depends on crypto assets. It also sets out how client custody assets should be treated. Client assets held by digital custodians within a bank or banking group would be included if the institution bears losses on those assets. Assets for which the institution does not bear losses would not be included, though they would still carry a 50% risk weight. Positions on a bank’s own account, as well as client holdings for which the bank bears responsibility, would be assigned a 1250% risk weight. The draft is scheduled for formal release in the fourth quarter of 2026, would take effect 10 days after publication, and banks are expected to begin reporting N31 and N32 values from January 2027.
