Stablecoins Fail to Gain Cost Advantage Over Traditional Remittances

A recent study by the Bank of Italy found that stablecoin-based remittances do not offer a consistent cost advantage over traditional payment channels. The researchers tested 200 USDC remittances across 10 bidirectional payment corridors linking Italy with Brazil, Argentina, Japan, the United Arab Emirates and South Africa.

The study compared end-to-end costs and settlement times with traditional remittance services. They found that exchange fees and currency conversion made up most of the cost, while blockchain transaction fees represented only a small share. Total costs ranged from 0.3% to nearly 9% depending on the payment corridor.

According to the World Bank's reported global average remittance cost of 6.65%, stablecoin transfers were cheaper in most of the payment corridors examined, but less expensive than Wise in only three of seven comparable corridors. The study concluded that investment in domestic instant payment infrastructure could improve the competitiveness of stablecoin-based cross-border payments.