The Bank of Russia wants to limit the role of crypto in market professionals’ accounts. Its new draft regulation sets a 25% threshold for digital assets considered in the calculation of their equity. Brokers, managers, forex dealers, and crypto exchange platforms are concerned. Moscow thus allows crypto more, without giving it too much space in intermediaries’ balance sheets.
In Brief
- Cryptos will not be able to represent more than 25% of the assets considered in the equity calculation.
- The rule especially concerns brokers, managers and crypto platforms.
- Assets must also be registered with a Russian crypto custodian.
Crypto Enters Brokers’ Accounts
The Bank of Russia published its draft on August 14. It comes a few days after the opening of the Russian market to bitcoin, ether, and USDT. This time, the text targets professionals directly. Brokers will be able to include certain cryptocurrencies in the calculation of their equity. The same applies to securities managers, forex dealers, and companies trading digital assets.
Not just any crypto, however. Assets must have been admitted for trading on a Russian organized market. They must also appear in the accounts of a recognized crypto custodian.
Then comes the limit. The value of cryptos considered in the calculation cannot exceed 25% of the total value of assets used to determine the company’s equity. So this is not simply about banning a broker from holding more crypto. The cap concerns the share that can be entered into this prudential calculation. An important nuance.
The Bank of Russia Wants to Avoid Overexposed Balance Sheets
The regulator mainly wants to ensure that intermediaries have enough capital to absorb losses. Cryptos will now enter the calculation of market risk and credit risk. A strong exposure will thus directly impact the ratios used to measure a broker’s financial strength.
