Bank of Russia proposes 25% cap on crypto holdings for market participants

The Bank of Russia has issued a draft regulation that would allow professional market participants, including brokers, asset managers, forex dealers, and cryptocurrency exchanges, to include cryptocurrency holdings in their capital-adequacy and equity calculations. Under the proposed rules, these digital assets can constitute a maximum of 25% of the total equity value.

To qualify for these calculations, the digital currencies must be admitted to organized trading by Russian operators and registered with a Russian digital depository. Specific examples of eligible assets include Bitcoin and Ethereum. Firms are required to value these holdings at fair value according to International Financial Reporting Standards, accounting for both market and credit risks.

The move is part of a broader legislative framework for the cryptocurrency market, following a law signed by President Putin. While the regulation aims to enhance the financial resilience of intermediaries and allow for better assessment of market risks, the use of cryptocurrencies as an internal payment method remains prohibited. The draft regulation is currently open for public consultation.