The Bank of Italy has published a study concluding that stablecoin-based remittances do not consistently outperform traditional payment channels in terms of cost or speed. The research, which analyzed 200 USDC transfers across ten payment corridors linking Italy with Brazil, Argentina, Japan, the United Arab Emirates, and South Africa, found that fiat conversion fees and payment infrastructure, rather than blockchain transaction costs, were the primary drivers of overall expenses and settlement delays.
Cost breakdown: fiat friction dominates
According to the study, total costs for stablecoin remittances ranged from 0.3% to nearly 9% depending on the corridor. Exchange fees and currency conversion accounted for the majority of these costs, while blockchain transaction fees represented only a small fraction. Settlement times varied significantly: transfers settled in under 20 minutes in corridors with instant payment systems, but took one to two business days where such infrastructure was absent.
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The researchers benchmarked their findings against the World Bank’s global average remittance cost of 6.65%. Stablecoin transfers were cheaper in most of the corridors examined, but when compared directly with Wise, a leading digital remittance service, stablecoins were less expensive in only three of seven comparable corridors. This suggests that the perceived cost advantage of stablecoins is not universal and depends heavily on local payment rails and fiat conversion efficiencies.
Payment infrastructure and regulation are decisive
The study emphasizes that the quality of domestic instant payment infrastructure is critical to the competitiveness of stablecoin-based cross-border payments. The authors argue that the most significant gains would materialize if stablecoins could be spent directly in the real economy without reconversion into local fiat currency. The report states: “If stablecoins could be spent directly in the real economy, for goods and services, rents, or school fees, without reconversion into local fiat currency, the economic advantages of stablecoin-based transfers would be substantially higher.”
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Regulatory frameworks also played a major role in shaping transfer efficiency. The study found that prohibitionist regimes did not fully suppress stablecoin demand but instead pushed users toward offshore platforms and unregulated channels. Overly restrictive frameworks, meanwhile, increased operational complexity for retail users. These findings arrive as the European Union’s Markets in Crypto-Assets (MiCA) framework and the United States’ GENIUS Act are being implemented, both of which govern crypto assets and payment stablecoins.
Market context and implications
The stablecoin market has grown to approximately $307 billion, up about 16% over the past year, according to DefiLlama data. This growth underscores the increasing relevance of stablecoins in cross-border payments, yet the Bank of Italy’s research suggests that their efficiency gains are contingent on broader financial infrastructure and regulatory design. For policymakers, the study highlights the importance of investing in instant payment systems and creating regulatory environments that do not inadvertently push users toward less transparent channels.
For consumers and businesses considering stablecoin remittances, the practical takeaway is that cost and speed vary significantly by corridor. While stablecoins can offer advantages in certain markets, traditional services like Wise may still be more competitive in others. The study’s findings are particularly relevant for regions with underdeveloped payment infrastructure, where stablecoins could complement existing systems rather than replace them.
Conclusion
The Bank of Italy’s study provides a nuanced view of stablecoin remittances, indicating that they are not inherently superior to traditional methods. The primary barriers to efficiency are fiat on- and off-ramp costs and the quality of local payment rails, not blockchain fees. As regulatory frameworks like MiCA and the GENIUS Act evolve, and as instant payment infrastructure expands, the competitive position of stablecoins may improve. For now, the decision to use stablecoins for remittances should be made on a case-by-case basis, weighing corridor-specific costs and settlement times.
FAQs
Q1: Are stablecoin remittances always cheaper than traditional methods?
No. The Bank of Italy study found that stablecoin transfers were cheaper in most corridors compared to the World Bank’s global average, but they were less expensive than Wise in only three of seven comparable corridors. Costs varied from 0.3% to nearly 9% depending on the payment corridor.
Q2: What factors most affect stablecoin remittance costs?
The study found that fiat conversion fees and currency exchange costs were the largest components, while blockchain transaction fees were minimal. The quality of local payment infrastructure also significantly influenced settlement times, with instant payment systems enabling transfers in under 20 minutes.
Q3: How does regulation impact stablecoin remittances?
Regulatory design plays a critical role. Prohibitionist regimes can push users toward offshore platforms, while overly restrictive frameworks increase operational complexity. Balanced regulations, such as the EU’s MiCA and the US GENIUS Act, aim to provide clarity and consumer protection, potentially improving the efficiency and adoption of stablecoin-based payments.
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