Bank of Russia Proposes 1% Cap on Banks' Crypto Capital Holdings

WHY IT MATTERS

When a bank holds risky assets on its own books, it can threaten the bank's stability — and by extension, its customers' deposits. Think of it like a rule saying a grocery store can only use 1% of its budget to stock an exotic, perishable product that might spoil. The cap limits how much the bank itself can lose if crypto prices drop sharply. At the same time, the proposal would let banks act as a kind of safe-deposit box for customers' crypto, holding it on their behalf without it counting toward that limit. This distinction between a bank owning crypto versus storing it for someone else is an important concept in banking regulation, because custody (holding assets for others) carries different risks than proprietary ownership.