The formation of the cross-border crypto settlement market in Russia is following a scenario painfully familiar from the launch of digital financial assets (DFAs). A long path from the first conversation to a deal, low returns at the start, and colossal efforts to educate clients are the key characteristics of the current stage.
I have been tracking this pattern for several months now. And, judging by the statements of top management at the largest banks, my observations are fully confirmed. The crypto settlement market, like the DFA market several years ago, is in a "zero cycle" stage.
Building a Market from Scratch: Lessons from DFAs
The key difficulty of the new market lies not in the technology — it has long been refined. The problem is that the market has to be created from scratch. Clients simply do not understand why they need a new tool. As a result, the path from the first contact to signing a contract is prohibitively long.
"When we launched DFAs from scratch, clients had no idea why it was needed. You have to go through a very long journey to get from the start of a conversation to a specific deal," described the experience of a representative from one of the leading banks. And this experience is now fully projected onto the cryptocurrency settlement market.
Many Conversations, Low Returns
The second lesson the crypto settlement market is learning from DFAs is the high entry cost for banks. The early stage requires a huge volume of conversations, marketing, and client education. Meanwhile, returns in the initial phases remain extremely low. Banks are forced to invest resources in "warming up" an audience that is not yet ready for mass adoption of the tool.
A particular challenge is conveying pricing to the client. Many simply do not understand how to compare the new tool with already available ones (for example, traditional bank transfers) or how to assess whether it is expensive or cheap. This factor creates an additional barrier to decision-making.
Cryptalist Analytics
As an analyst, I see a clear signal in this parallelism: the crypto settlement market in Russia is repeating the infrastructural path of DFAs, but with one important difference. While DFAs developed under relatively stable regulatory conditions, crypto settlements are under constant pressure from uncertainty. This makes the process of "educating" clients even more costly. My forecast: a breakthrough in this market will occur no earlier than in 12–18 months, when a critical mass of successful cases is accumulated and a clear regulatory framework is formed. Until then, banks will bear the main burden of generating demand, while returns will remain minimal.