Financial intermediaries to recalculate financial resilience ratios taking into account cryptocurrency
The Bank of Russia has put cryptocurrencies on the list of assets that professional market participants must include in the calculation of prudential ratios characterising their financial resilience. The regulator has published the related draft ordinance to assess its regulatory impact. These rules will also apply to cryptocurrency exchange offices.
When calculating their equity, brokers, trustees, forex dealers, and cryptocurrency exchange offices may only take into account those cryptocurrencies that have been admitted to trading on exchanges. These instruments may account for no more than 25% of the value of assets included in the calculation. Furthermore, to include cryptocurrencies in this limit, professional market participants must register them with crypto depositories.
The draft ordinance establishes the procedure and cases for taking cryptocurrencies into account when assessing credit and market risks for capital adequacy calculation purposes, as well as limits on their share in professional market participants’ equity. This ratio will mean that they have sufficient funds to cover potential losses.
Owing to the new approach, the ratios will factor in cryptocurrency-related risks and help ensure intermediaries’ financial resilience in cryptocurrency transactions.