Bank of Russia Slams Brakes on Crypto Exposure with New Rules

The Bank of Russia has proposed strict capital and exposure rules for lenders participating in the country's regulated crypto market. The new draft rules would limit banks' total exposure to cryptocurrencies and foreign digital instruments to 1% of their own funds.

The proposal divides crypto-related exposures into two risk groups, with different rules for calculating long and short positions. Group 1 covers certain derivatives and transactions meeting specified conditions, while Group 2 includes direct investments in cryptocurrencies and other higher-risk exposures.

Banks would have to remain within the 1% limit on every operating day. The draft also proposes a 1,250% risk weight for aggregate crypto exposure and certain client positions for which banks assume responsibility.