Banking spreads on cryptocurrency in Russia: why high fees will become a thing of the past
The launch of cryptocurrency banking operations in Russia will be accompanied by inflated spreads, but maintaining a markup of 5–7% or more in a competitive market will not be possible. This is my analysis of the market situation, based on an assessment of current trends and expertise in transactional banking.
The key factor determining the price for the client is not so much the bank's desire to earn, but rather the aggregate of costs: the cost of liquidity, the client's willingness to overpay for a regulated framework, and the difference compared to familiar fiat transfer channels. At the start, banks will be forced to factor in compliance costs, hedging, and the creation of new infrastructure, which will inevitably lead to a markup of several basis points on individual products.
Why spreads will be high at first and then decline
At the initial stage, high margins are inevitable: banks need to recoup investments in the legal structure, technology stack, and risk management. However, sustainable spreads of 5–7% and higher are an anomaly that will disappear as new players enter the market. As soon as several banks and other regulated participants appear, margins will begin to compress fairly quickly.
It is important to understand: the spread is shaped by the market, not the regulator. The final price is composed of the global cost of the crypto asset, liquidity costs, hedging and infrastructure costs, as well as the margin of a specific bank. The regulator, in turn, will only determine access rules, the composition of participants, and infrastructure, but will not set fixed buy and sell quotes. Therefore, markups may vary significantly across different banks.
Within an individual bank, the spread will depend on the number of active product users, the volume of real client liquidity, and the cost of liquidity that must be held on balance sheets. Infrastructure and legal costs are secondary factors, but they cannot be dismissed either.
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 rather than a product with an administratively set tariff.
The mass client is currently not ready to pay for the word "bank" itself. The level of stress among the retail audience has been high since 2022: the Russian user is willing to accept many scenarios to meet their needs, but not an unjustifiably high cost of service. The picture is different for wealthy 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: the Russian banking cryptocurrency market will see a rapid normalization of margins. The first players will try to extract maximum benefit from the supply shortage, but already in the medium term, competition and the demands of large clients will lead to a reduction in spreads to levels comparable to traditional financial instruments. Banks that do not incorporate flexible pricing into their strategy will face difficulties.