Competition will force Russian banks to reduce spreads on cryptocurrency.
The launch of cryptocurrency banking operations in Russia will be accompanied by inflated spreads, but maintaining a markup of 5–7% or higher in a competitive market will not be possible. Such is my analysis of market dynamics, based on the assessment of transactional banking and payments expert Victoria Goldenberg.
The key factor that will determine the price for the client is not the bank's appetite for excess profits, but the cost of liquidity, the client's willingness to pay for a regulated framework, and the difference compared to familiar fiat transfer channels. At the initial stage, banks will be forced to factor into the price the costs of liquidity, compliance, hedging, and the creation of new infrastructure. In certain products, the markup could reach several basis points, making spreads inevitably high at the start.
Why spreads will first rise and then decline
It is expected that the first months of banks working with digital assets will be characterized by elevated spreads. However, I do not see sustainable grounds for maintaining a 5–7% markup in a competitive market. As soon as several banks and other regulated participants enter the market, margins will begin to compress fairly quickly. The market, not the regulator, will shape the final spread. It will be composed of the global price of the crypto asset, the cost of liquidity, hedging, infrastructure, and the margin of the specific bank.
The Central Bank of Russia, as I believe, will focus on access rules, the composition of participants, and market infrastructure, rather than setting specific buy and sell quotes. Therefore, markups may vary significantly across different banks. Within a single bank, the spread will depend on the number of active product users, the volume of real user liquidity in the order book, and the cost of the bank's own liquidity, which will be required on balance sheets in significant amounts. Infrastructure and the legal structure are secondary factors.
Who will win the battle for the client
Victory will go to those with a larger marketing budget and a greater willingness to take risks for a dominant position in the new economy. This is not only about qualified investors. The more liquidity providers and competition among banks, the closer prices will be to market levels. The mechanism here resembles the foreign exchange market, not a product with an administratively set tariff.
The mass client is currently not ready to pay for the mere word "bank." This is linked to the level of stress among the retail audience since 2022: the Russian user is willing to accept many scenarios to meet their needs, except one—an unjustifiably high cost of service. A different picture emerges with affluent clients. Large capital continues to move between countries, and with an average transaction size of 3–5 million rubles, a person is willing to pay for speed, transparency, and the absence of problems. Which one such a client will prefer—their own accountant or a Russian bank—is a rhetorical question.
My conclusion: banks that are the first to build an efficient liquidity model and do not abuse client trust at the start will gain a strategic advantage. Spreads of 5–7% are a temporary phenomenon, and investors who are currently overpaying for "regulatability" will soon see fair market quotes.