Russia’s Central Bank Proposes Capping Banks’ Crypto Exposure at 1% of Capital

The Bank of Russia has published a draft rule that would sharply limit how much exposure the country’s commercial banks can carry to cryptocurrency, proposing a hard cap set at just 1% of a bank’s own capital. Below is a breakdown of what the draft actually says, in question-and-answer form.

What exactly is being capped?

The September 18 draft would require banks to keep their exposure to crypto assets and related instruments within 1% of their own capital. Covered exposure includes direct crypto holdings, derivatives tied to digital currencies, loans collateralized by crypto, and bonds whose value depends on cryptocurrency or foreign digital financial instruments — essentially any crypto-linked position sitting on a bank’s own balance sheet.

How would the rule actually be enforced?

The proposal introduces two new regulatory ratios: N31, applied to individual credit institutions, and N32, applied to banking groups on a consolidated basis. Both ratios measure covered crypto exposure against the institution’s own capital rather than its total assets, meaning the cap tightens or loosens in step with how well-capitalized a given bank is. On the capital treatment side, the draft would apply a steep 1,250% risk weight to a bank’s aggregate crypto exposure and to certain client positions where the bank itself assumes responsibility — a weighting severe enough to make holding meaningful crypto exposure capital-expensive even within the 1% ceiling.

What happens if a bank breaches the cap?

Banks would be required to comply with the new ratios on a daily basis. Breaching the limit on more than six days within any rolling 30-business-day window could trigger regulatory action from the central bank, giving institutions some flexibility for brief technical breaches while still enforcing the ceiling as a real constraint rather than a soft guideline.

Does this apply to client-held crypto assets too?

Not entirely. The draft carves out certain client custody positions from the exposure calculation, distinguishing between crypto a bank holds or is on the hook for itself versus crypto it merely custodies on behalf of clients without assuming direct risk. That distinction matters for Russian banks that are separately moving into regulated crypto services — Sberbank, the country’s largest bank, has said it plans to launch a crypto wallet and digital custody offering within its consumer apps by early December.

When does this take effect?

The rule remains in draft form. Formal publication is scheduled for the fourth quarter of 2026, with the regulation taking legal effect 10 days after that publication. Banks would not need to begin reporting their N31 and N32 ratios to regulators until January 2027, giving institutions a multi-month runway to adjust their balance sheets ahead of enforcement.

Why is the central bank doing this now?

The proposal arrives as Russia’s broader crypto regulatory framework continues to take shape following the country’s new crypto law, and as retail interest in regulated crypto trading grows — regulated Russian exchange volume is projected to exceed $46 billion in its first year of operation. A strict capital cap on banks’ own crypto exposure allows the central bank to permit growth in retail and institutional crypto activity through licensed channels while insulating the banking system itself from concentrated exposure to a historically volatile asset class.

Regulatory proposals can change materially between draft and final form, and this article reflects the terms of the draft as published. It does not constitute financial or legal advice. Curious how banking-style risk concepts apply to crypto more broadly? Browse coin680’s Bitcoin Academy.