Competition will bring down banking spreads on cryptocurrency in Russia: analysts' forecast
The Russian banking sector is preparing to enter the cryptocurrency operations market, and, in my estimation, the first steps will be accompanied by inflated spreads. However, this is a temporary phenomenon: as soon as several major players enter the market, margins will begin to melt rapidly. It simply will not be possible to maintain a markup of 5–7% or more under conditions of real competition.
Why starting spreads will be high
At the initial stage, banks are forced to factor significant costs into the price: the cost of liquidity, compliance procedures, risk hedging, and the creation of new infrastructure. In certain products, the markup could reach several basis points. This is an inevitable price to pay for entering a new, not yet refined segment.
However, I do not see any fundamental prerequisites for maintaining such levels. The market, not the regulator, will determine the final price for the client. The spread will be composed of the global price of the crypto asset, the cost of liquidity, hedging, infrastructure expenses, and the margin of a specific bank. As new participants emerge, including non-bank regulated players, margins will compress fairly quickly.
The role of the regulator and market mechanisms
The Bank of Russia, it seems, will focus on access rules, the composition of participants, and infrastructure, rather than on setting specific quotes. This means that markups across different banks could vary significantly. Within a single bank, the spread will depend on the number of active users, the volume of real client liquidity, and the cost of liquidity on the balance sheet. Infrastructure and legal costs are second-order factors.
The pricing mechanism will resemble the foreign exchange market, not a product with an administratively set tariff. The more liquidity providers there are and the higher the competition, the closer prices will be to market levels. This is a natural process that we have already observed in other segments of the financial market.
Who will win the battle for the client
The mass-market client today is not willing to pay simply for the word "bank." The level of stress among the retail audience has remained high since 2022: the Russian user is willing to accept many scenarios, but not an unjustifiably high cost of service. The picture is different for affluent clients. Large capital continues to migrate between countries, and with an average transaction of 3–5 million rubles, a person is willing to pay for speed, transparency, and the absence of problems. The question of whom such a client will prefer—their own accountant or a Russian bank—is rhetorical.
My conclusion: banks that are the first to build efficient infrastructure and offer competitive terms will capture a dominant market share. The rest will have to either reduce margins to near zero or exit this line of business. Spreads of 5–7% are a temporary anomaly that will disappear within the first few quarters of active competition.