Stablecoin Remittances Fall Short in Cost Efficiency

A new study from the Bank of Italy challenges a common assumption about stablecoins in cross-border payments. The research found that using stablecoin transfers for remittances may not automatically deliver better economics or faster delivery than established payment rails.

The study evaluated 200 remittances denominated in USDC across 10 bidirectional payment corridors connecting Italy with Brazil, Argentina, Japan, the United Arab Emirates, and South Africa. Researchers compared end-to-end fees and settlement times against traditional remittance services.

The key takeaway from the research is that exchange and currency-conversion charges made up the majority of total remittance cost, while blockchain transaction fees were only a small portion. The researchers found that most expenses and delays were driven by fiat on- and off-ramp frictions rather than by blockchain execution itself.

The study also found that stablecoin remittance costs ranged from 0.3% to nearly 9%, depending on the corridor, while settlement time was typically under 20 minutes where instant payment systems were available.