Banking spreads on cryptocurrency in Russia: why high markups are doomed to decline
The Russian banking sector is preparing to launch cryptocurrency operations, and the first steps along this path, it seems, will be accompanied by inflated spreads. However, maintaining a markup of 5–7% or higher in a competitive market will not be sustainable for long. This is not a matter of banks' desire to profit, but rather a question of market mechanics and the maturity of the client base.
Why starting spreads will be high
At the initial stage, banks will have to factor significant costs into the price: the cost of liquidity, compliance procedures, risk hedging, and the creation of new infrastructure. In certain products, the markup could reach several basis points, which is quite understandable given the lack of streamlined processes and a limited number of participants.
However, a sustained spread of 5–7% is an anomaly that has no right to exist under healthy competition. As soon as several major banks and other regulated players enter the market, margins will begin to compress. The market, not the regulator, will determine the final price. The spread will be shaped by the global price of the asset, the cost of liquidity, hedging, and the infrastructure costs of a specific bank.
The role of the regulator and internal factors
The Central Bank of Russia will likely focus on access rules, the composition of participants, and infrastructure, rather than setting specific quotes. This means that markups may vary significantly across different banks. Within a single bank, the spread will depend on the number of active users, the actual liquidity in the order book, and the cost of liquidity for the bank itself. Infrastructure and the legal structure are secondary.
The pricing mechanism will resemble the foreign exchange market rather than a product with an administratively set tariff. The more liquidity providers and competition there are, the closer prices will be to market levels. This is a classic scenario that we have already observed in other segments of the financial market.
Who will win the battle for the client
The mass-market client today is not willing to overpay just for the word "bank." The level of stress among the retail audience has been high since 2022, but this does not mean that users will accept unjustified markups. The picture is different for affluent clients. Large capital continues to migrate 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 who they will trust with their funds—their own accountant or a Russian bank. The answer seems obvious.
My view: banks that are the first to build a fair and transparent pricing model will capture the lion's share of the market. Those who try to extract excess profits at the start risk being left out once competition becomes real. The market will set its own priorities, and it is only a matter of time.