Competition will bring down bank spreads on cryptocurrency in Russia: expert forecast
The launch of cryptocurrency banking operations in Russia will be marked by inflated spreads, but maintaining a markup of 5–7% or higher in a competitive market will not be possible. Such is my analysis, based on the assessments of Victoria Goldenberg, a leading specialist in transactional banking and payments.
Why spreads will be high at first, then decline
At the start, banks are forced to factor into the price the cost of liquidity, compliance, hedging, and expenses for new infrastructure. In certain products, the markup could reach several basis points. However, as I see it, sustainable spreads of 5–7% and higher on a competitive playing field are a temporary phenomenon. As several banks and other regulated players enter the market, margins will rapidly compress.
The key factor here is market-based pricing, not regulatory dictate. The final spread is composed of the global price of the crypto asset, the cost of liquidity, hedging, infrastructure, and the specific bank's margin. The Bank of Russia, as I emphasize, will focus on access rules, participant composition, and infrastructure, but will not set specific buy and sell quotes. Therefore, the markup across different banks may vary significantly.
Within a single bank, the spread will depend on the number of active product users, the volume of real client liquidity in the order book, and the cost of the bank's own liquidity, which will be required on balance sheets in significant amounts. I classify infrastructure and legal structure costs as secondary factors.
Who will win the competition for users
Victory will go to those with larger marketing budgets 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 currency market, not a product with an administratively set tariff.
The mass client is not willing 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. The picture is different for affluent clients. 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. Which such a client will prefer—their own accountant or a Russian bank—is a rhetorical question.
My expert opinion: The market for bank cryptocurrency in Russia is set for a rapid cooling of margins. Those who first build reliable infrastructure and can offer competitive spreads will capture a loyal audience, while players with inflated appetites will be left on the sidelines.