Stablecoin Remittances Lack Consistent Cost Advantage Over Traditional Channels
A new Bank of Italy study reveals that fiat conversion frictions erase the theoretical speed and cost benefits of stablecoin cross-border payments, signaling limited near-term disruption for established remittance providers.
Stablecoin-based cross-border payments do not offer a systematic cost or speed advantage over traditional remittance channels, according to a new study by the Bank of Italy. Researchers concluded that fiat on- and off-ramp frictions, rather than blockchain network fees, drive the majority of transfer costs and delays.
The central bank’s researchers tested 200 USDC remittances across ten bidirectional payment corridors linking Italy with Brazil, Argentina, Japan, the United Arab Emirates, and South Africa. Total costs for these transfers ranged from 0.3 percent to nearly 9 percent, heavily dependent on the specific corridor and associated currency conversion fees.
While these costs frequently undercut the World Bank’s reported global average remittance cost of 6.65 percent, stablecoins struggled to beat specialized fintech incumbents. The study noted that stablecoin transfers were less expensive than Wise in only three of seven comparable corridors.
Settlement times proved equally dependent on legacy financial infrastructure. Transfers settled in under 20 minutes only where domestic instant payment systems were already available, whereas corridors lacking such rails experienced delays of one to two business days.
The authors argued that the primary bottleneck is the mandatory reconversion into local currency. "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," the report stated.
Regulatory frameworks also emerged as a critical determinant of transfer efficiency. The researchers observed that prohibitionist regimes fail to suppress stablecoin demand, merely pushing users toward offshore and unregulated platforms, while overly restrictive rules unnecessarily increase operational complexity for retail participants.
These findings arrive as major jurisdictions formalize their digital asset rules. The European Union has implemented its Markets in Crypto-Assets framework, while the United States has enacted the GENIUS Act to govern payment stablecoins.
Despite the identified friction points, the underlying asset class continues to expand. The global stablecoin market has grown to approximately $307 billion, reflecting a 16 percent increase over the past year, according to DefiLlama data.
