Banking spreads on cryptocurrency in Russia: why high fees are doomed to decline
With the start of cryptocurrency banking operations in Russia, spreads in this market will be noticeably higher than on classic crypto exchanges. However, a sustained markup level of 5–7% or more amid competitive pressure is more of a temporary phenomenon than a long-term trend. The only question is how quickly the market will reach equilibrium.
Why starting spreads will be high
At the initial stage, banks are forced to factor into the client price the costs of liquidity, compliance, risk hedging, and building new infrastructure. These costs are significant, and in certain products the markup can reach several basis points or even percentages. However, maintaining such a margin in a competitive market will not be possible—the gap between client expectations and the real cost of services is too wide.
The key factor here is not the bank's desire to earn, but the cost structure. The spread is formed from the global asset price, the cost of liquidity, hedging, and the specific bank's infrastructure. The regulator, in turn, will not set fixed quotes. The Bank of Russia will focus on access rules, participant composition, and market infrastructure, leaving pricing to the discretion of players.
Competition—the main driver of reduction
As several banks and other regulated participants enter the market, the margin will begin to compress. The mechanism will resemble the currency market, where prices are determined by supply and demand, not administrative tariffs. The more liquidity providers there are, the closer prices will be to market levels.
Mass-market clients today are not willing to overpay just for the word "bank." The level of stress among retail audiences has been high since 2022, and users are open to many scenarios except one—unjustifiably high service costs. Wealthy clients, however, are a completely different story. Large capital continues to move 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 only question is whom they will trust with their funds—their own accountant or a Russian bank.
My view: the reduction of spreads is an inevitable process, but its speed will depend on banks' willingness to invest in liquidity and client service. Those who do this first will gain a dominant position in the new economy, while the rest will be left on the sidelines.