Bank of Russia Proposes 1% Crypto Risk Limit for Banks

The Bank of Russia has proposed limiting banks’ exposure to cryptocurrencies and foreign digital instruments to 1% of their own funds as lenders enter the country’s newly regulated crypto market.

The draft creates two prudential ratios covering banks’ own crypto positions and certain related financial instruments. The regulation is scheduled for publication in the fourth quarter of 2026, with reporting beginning in January 2027.

N31 and N32 Would Cap Covered Exposure at 1% of Capital

The suggested N31 ratio applies to individual credit institutions, while N32 measures exposure across a banking group on a consolidated basis. Both would carry a maximum threshold of 1%.

The calculation extends beyond cryptocurrency held directly on a bank’s balance sheet. It also captures financial instruments whose payouts depend on cryptocurrencies or foreign digital instruments.

Covered exposures can include derivatives and other positions linked to those assets. Relevant proprietary positions and client exposures for which the institution bears the associated loss risk can receive a 1,250% risk weight under the draft.

Some Client Crypto Positions Would Stay Outside 1% Limit 

The 1% ceiling does not automatically include crypto held for customers. Client positions can be excluded from N31 and N32 when a bank or affiliated digital depository is not responsible for losses if the assets are frozen or restricted because of sanctions. Positions where the institution bears that risk can enter the calculation.

The framework also allows long and short positions to be netted for assets with sufficiently low freezing and liquidity risks. The distinction means the proposal limits crypto-related risk carried by banks rather than imposing a 1% ceiling on customer crypto holdings or trading activity.

N31 and N32 Reporting Would Begin in January 2027 

The Bank of Russia plans to require lenders to report turnover in covered instruments alongside their N31 and N32 ratios beginning in January 2027. Detailed reporting forms are still being developed.

The new requirements would take effect 10 days after official publication of the regulation, which is scheduled for the fourth quarter of 2026.

Russia’s broader cryptocurrency framework took effect Sept. 1, allowing qualified and non-qualified investors to trade crypto through regulated intermediaries under separate eligibility and investment rules.

The proposed N31 and N32 ratios add a bank-capital safeguard to that framework without setting a new limit on how much cryptocurrency individual customers can hold.