Bank of Italy research suggests stablecoins aren't necessarily cheaper for remittances
A Bank of Italy study found that stablecoin remittances are not systematically cheaper than traditional money transfer operators once the full journey is taken into account. End-to-end costs varied dramatically, ranging from 0.3% to almost 9% of the value transferred.
Intelligence analysis by Llama
The Bank of Italy tested 200 USDC remittances across 10 international payment corridors and found that blockchain transaction fees represented only a tiny fraction of overall costs. Exchange fees, foreign exchange spreads, and local banking charges accounted for the bulk of expenses.
Imagine you want to send money to someone in another country. You can use a special kind of money called a stablecoin, which is like a digital dollar. But when you send it, you have to convert it into the local currency, which can be expensive. The Bank of Italy did a study and found that stablecoins are not always cheaper than traditional money transfer operators, because of all the extra fees and conversions involved.
Analysis
A $60B Vote of Confidence
The Bank of Italy's research suggests that stablecoins have solved the problem of moving value across blockchains, but the harder and more expensive challenge remains getting that value into the hands of someone who simply wants to spend it. The study found that end-to-end costs varied dramatically, ranging from 0.3% to almost 9% of the value transferred, depending on the corridor and service providers used. This highlights a key blind spot in the industry, where much of the marketing around stablecoin remittances focuses on the cost of transferring tokens across blockchain networks, but ignores the costs of converting between fiat and stablecoins.
Why Cursor?
The researchers found that blockchain transaction fees represented only a tiny fraction of overall costs, with exchange fees, foreign exchange spreads, and local banking charges accounting for the bulk of expenses. This suggests that the technology has failed to deliver on its promise of consistently cheaper remittances. However, the study also notes that stablecoins can reduce costs in specific corridors, while their always-on settlement and programmability remain meaningful advantages over legacy payment rails.
The Road Ahead
The report argues that the benefits of stablecoins do not yet translate into consistently cheaper remittances once the entire payment chain is considered. However, it also points toward what may ultimately unlock stablecoins' original promise. As regulated off-ramp providers proliferate under frameworks such as Europe's MiCA regime and domestic instant payment systems become more closely integrated with digital asset infrastructure, competitive pressure could narrow conversion fees. Even then, foreign exchange spreads are likely to remain an unavoidable component of international payments.
Key points
- The Bank of Italy tested 200 USDC remittances across 10 international payment corridors and found that blockchain transaction fees represented only a tiny fraction of overall costs.
- Exchange fees, foreign exchange spreads, and local banking charges accounted for the bulk of expenses.
- The study highlights a blind spot in the industry, where much of the marketing around stablecoin remittances focuses on the cost of transferring tokens across blockchain networks, but ignores the costs of converting between fiat and stablecoins.
If regulated off-ramp providers proliferate and domestic instant payment systems become more closely integrated with digital asset infrastructure, competitive pressure could narrow conversion fees, making stablecoin remittances more cost-effective.
The study suggests that stablecoins have not yet delivered on their promise of consistently cheaper remittances, and that foreign exchange spreads are likely to remain an unavoidable component of international payments.
