Stablecoins Fall Short of Promising Cheaper Cross-Border Payments

A new study from the Bank of Italy has found that using stablecoin transfers for remittances may not necessarily deliver better economics or faster delivery than established payment rails.

The researchers evaluated 200 USDC remittance flows across 10 bidirectional payment corridors connecting Italy with Brazil, Argentina, Japan, the United Arab Emirates and South Africa. They compared end-to-end fees and settlement times against traditional remittance services, concluding that most expenses and delays were driven by fiat on- and off-ramp frictions rather than blockchain execution itself.

The study found that exchange and currency-conversion charges made up the majority of total remittance cost, while blockchain transaction fees were only a small portion. Total 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.

The researchers argued that improvements to domestic instant payment infrastructure and reduced reliance on reconversion into fiat are likely to matter more than blockchain technology alone in reducing costs and improving efficiency for stablecoin-based cross-border payments.