Bank spreads on cryptocurrency in Russia: why high markups are a temporary phenomenon
The launch of cryptocurrency banking operations in Russia will inevitably be accompanied by inflated spreads. At the initial stage, markups will be noticeably higher than on classic crypto exchanges, but banks are unlikely to sustain margins of 5–7% or more in a competitive market. This is my analysis of the current dynamics, based on assessments from experts in transactional banking.
The key factor that will determine the final price for the client is not the bank's desire to profit, but the real cost of liquidity. It is also important to consider the client's own willingness to overpay for a regulated framework and the difference compared to the cost of familiar fiat transfer channels.
Why spreads will be high at first and then decline
At the start, banks will be forced to factor significant costs into the price: the cost of liquidity, compliance procedures, hedging, and building new infrastructure. For certain products, the markup could reach several basis points. However, I see no prerequisites for spreads to sustainably remain at 5–7% or higher. As soon as several banks and other regulated participants enter the market, margins will begin to compress fairly quickly.
It is important to understand: the spread will be shaped by the market, not the regulator. It is composed of the global price of the crypto asset, the cost of liquidity, hedging, infrastructure, and the specific bank's margin. The Central Bank of Russia, I believe, will focus on regulating access rules, participant composition, and 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 client liquidity, and the cost of liquidity that the bank will have to hold on its balance sheets in significant amounts. I would classify infrastructure and legal structure costs as secondary factors.
Who will win the competitive battle for the client
Victory will go to those with the larger marketing budget and a higher willingness to take risks for dominance in the new economy. This is not only about qualified investors—the mass-market client also matters, but they are not yet ready to pay for the mere word "bank." This is linked to the high 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 completely 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. The question of whether such a client will prefer their own accountant or a Russian bank, I consider rhetorical.
My conclusion: in the short term, bank spreads will look alarmingly high, but this is merely the price of entering a new market. The more players that emerge, the faster margins will approach market levels. Banks that bet on technological sophistication and transparency, rather than administrative markups, will secure dominant positions in the coming years.