The Bank of Russia has proposed a new rule that would limit the crypto-related risk of Russian banks to 1% of their own funds. The proposal covers cryptocurrencies as well as foreign digital instruments. It comes as Russia builds a regulated market for digital assets and gives banks a clearer framework for crypto activity.
The draft rule would create two new risk ratios. N31 would apply to individual credit institutions, while N32 would apply to banking groups on a consolidated basis. Both ratios would have a maximum level of 1%. The limit would be based on a bank’s own funds rather than its total assets.
The proposal is still a draft. The Bank of Russia has released it for regulatory impact assessment. The regulator plans to publish the final regulation in the fourth quarter of 2026. Once officially published, the new rules would take effect after 10 days.
The rule covers more than direct crypto holdings
The proposed limit is not only about Bitcoin or other digital coins held by a bank. The Bank of Russia wants the calculation to cover a wider set of financial positions tied to crypto and foreign digital instruments.
This includes direct investments and crypto derivatives. It can also cover loans, bonds, repo deals, guarantees and credit lines when their value or settlement depends on cryptocurrencies or foreign digital instruments. This means a bank could face the limit even when it does not hold a large amount of crypto directly.
The broader approach matters because financial risk can exist through contracts as well as through direct ownership. A bank may have a relatively small crypto balance but still have a much larger financial exposure through related products.
By including these positions, the regulator seeks to measure the total risk that crypto-related activity may create for a bank’s capital.
What N31 and N32 mean
The proposed framework uses two ratios because banks can have exposure at more than one level.
N31 would measure the relevant crypto risk at the level of an individual credit institution. It would compare covered exposure with that bank’s own funds.
N32 would work at the consolidated level for a banking group. It would look at the relevant exposure across the group and compare it with the group’s own funds.
Both ratios would have the same maximum value of 1%. The two-part system allows the Bank of Russia to look at risk both at the level of a single bank and across a wider banking group.
The 1% figure therefore does not mean that a bank can spend 1% of its total assets on crypto. It refers specifically to the ratio between covered crypto-related risk and the institution’s own funds.
A very high 1,250% risk weight
Another major part of the draft is the proposed risk weight for certain crypto-related positions.
The rules would apply a 1,250% risk weight to covered crypto exposure and certain client positions where the bank has responsibility for the related loss. This is a very high capital treatment and shows how strongly the regulator wants banks to account for the risks tied to these assets.
A risk weight affects how much capital a bank must hold against a particular type of exposure. A higher weight means the position creates a larger capital requirement.
The draft also has a different treatment for some client custody positions. Where the bank does not carry the relevant responsibility for losses, some client assets would receive a 50% risk weight instead.
This distinction is important because the regulator is not treating every crypto position in the same way. The key question is partly whether the bank itself carries the financial risk if a problem occurs.
Some client assets can stay outside the limit
The draft makes a distinction between a bank’s own exposure and certain assets that belong to clients.
Client positions would not enter the calculation when the bank is not responsible for the client’s losses in the event of the materialisation of sanctions risk. This means some assets held by a bank for customers may remain outside the N31 and N32 calculations.
The rule is important for custody services. A bank can hold digital assets for a client without necessarily taking the same financial risk as it would if the bank owned those assets itself.
However, the treatment depends on the exact conditions set by the draft. Client custody does not automatically mean that a position is outside the framework.
The proposed approach gives banks a way to offer some crypto-related services while keeping the bank’s own balance-sheet risk under tighter control.
Limited netting of long and short positions
The Bank of Russia would also allow limited netting of certain long and short positions.
Netting means that qualifying positions in opposite directions can be offset when a bank calculates its overall exposure. For example, a long position and a short position may reduce each other if they meet the conditions set by the regulator.
The draft links this treatment to assets with low risks related to freezing and liquidity. In simple terms, the regulator wants to make sure that a position can actually be used to offset another position when the bank needs it.
This matters because crypto markets can face liquidity problems, trading restrictions and other barriers that may make an apparent hedge less useful during stress.
The proposed netting rules therefore do not give banks unlimited freedom to cancel one crypto exposure against another. Only positions that meet the required conditions would qualify.
Daily control of the 1% ceiling
The proposed framework is also designed for regular monitoring rather than a one-time capital check.
The draft provides for the 1% limit to apply on each operating day. Reports on the proposed framework state that repeated breaches could lead to regulatory action if a bank exceeds the limit on six or more days within a rolling period of 30 operating days.
This type of approach gives the regulator a way to distinguish between a short technical problem and a repeated breach of the limit.
For banks, it means crypto exposure would need close control. A bank could not simply remain below the limit during a formal reporting date while carrying a much higher position on other days.
The daily nature of the rule would make internal risk systems and regular monitoring more important for banks that take part in the digital asset market.
Reporting starts in January 2027
The Bank of Russia plans to require banks to report their crypto-related turnover as well as their N31 and N32 values from January 2027.
The reporting forms are still under development. This gives banks time to prepare systems that can identify the relevant transactions and calculate the new ratios.
The January 2027 date is important because it would mark the first regular reporting stage under the new framework. Banks that plan to offer crypto-related services will need systems that can separate covered positions from positions that do not fall under the ratios.
The regulator has not yet completed every detail of the reporting process. Those details should become clearer as the draft moves toward final adoption.
The rule comes after Russia’s new crypto law
The proposed bank limit is part of a much wider change in Russia’s approach to digital assets.
Russia’s new cryptocurrency law took effect on September 1, 2026. Under the new framework, both non-qualified and qualified investors can conduct crypto transactions through intermediaries.
Non-qualified investors can buy certain liquid cryptocurrencies up to ₽300,000 per year through one intermediary, after they pass a required test. Qualified investors can buy and sell cryptocurrencies without that amount limit, although they must also pass the test.
The Bank of Russia has also been building the market structure needed for regulated digital asset activity. Earlier draft rules covered organised crypto trading, digital depositories and related market infrastructure.
The regulator has proposed minimum equity requirements for digital depositories of ₽50 million to ₽250 million, based on the type of activity they plan to perform.
The 1% bank rule therefore arrives as part of a larger regulatory system rather than as a stand-alone crypto restriction.
Why the capital rule matters for Russian banks
Banks face a different set of risks when they deal with crypto assets. Prices can change sharply, markets can become less liquid, and access to an asset can face restrictions.
The Bank of Russia has already taken steps to include crypto in prudential rules for other financial intermediaries. In August 2026, it proposed rules that would require brokers, trustees, forex dealers and crypto exchange offices to account for cryptocurrency within financial resilience ratios. Eligible cryptocurrencies could make up no more than 25% of the assets used in that calculation.
The new bank proposal follows the same broader approach. Crypto activity can take place, but financial firms must have enough capital to absorb potential losses.
For banks, the 1% ceiling places a clear boundary around direct and indirect crypto exposure. It does not stop banks from taking part in the market altogether. Instead, it sets a limit on how much covered risk they can carry compared with their own funds.
What the rule means for banks and customers
For Russian banks, the proposed rule could affect how they design crypto products and services.
Direct crypto ownership would face the new capital limit. So would several financial products linked to digital assets. Banks may therefore need to decide which activities fit within their capital limits and which services can be offered without creating the same level of balance-sheet exposure.
For customers, the custody provisions are also significant. A bank may be able to hold digital assets for customers without counting every client position toward its own crypto exposure, provided the conditions in the draft are met.
The distinction could help separate the role of a bank as a service provider from its role as a crypto investor. That distinction is especially relevant as Russia develops regulated digital asset infrastructure.
What happens next
The proposal is not yet final. The Bank of Russia released the draft on September 18, 2026, and the regulator is assessing its impact before formal adoption.
The current plan calls for publication of the final regulation in Q4 2026. The rules would then take effect 10 days after official publication.
Banks will also face a reporting milestone in January 2027, when they are expected to report turnover in cryptocurrencies and foreign digital instruments together with their N31 and N32 figures.
Until the final regulation appears, some details could change. The core proposal, however, is clear: the Bank of Russia wants crypto-related risk at Russian banks to remain within a strict 1% ceiling based on their own funds.
The move shows how Russia is trying to build a formal crypto market while keeping bank exposure under tight capital controls. The new framework does not ban banks from crypto activity. Instead, it sets a narrow risk boundary and places strong capital requirements around the activities that fall inside it.
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