Stablecoin Costs Far Exceed Blockchain Fees

The idea that stablecoins are fee-free has been challenged by economists from Crédit Agricole in their recent study. They claim that the actual cost of a cross-border payment using stablecoins is much higher than what's displayed on the blockchain.

The researchers argue that three layers of overlapping costs need to be considered: transaction fees on the blockchain, conversions between fiat currency and stablecoins, and the financial infrastructure that facilitates the payment. The study shows that the total cost varies significantly depending on the currencies used, with a range of 18 to 180 basis points or 0.18% to 1.80% of the transferred amount.

The study also revisits a case published by OpenFX in July where two providers transferred $50 million from Mexico City to Dubai via USDC. The first provider made the funds available in 18 minutes, while the second took nearly 36 hours. The study concludes that access to local interbank systems and liquidity at the exit made all the difference.