USDC Remittance Costs Can Reach Nearly 9%, Bank of Italy Study Finds

A recent study by the Bank of Italy found that using USDC for cross-border remittances can be costly, with total costs ranging from 0.3% to a whopping 8.96%. The researchers sent 200 USDC across 10 different corridors and discovered that fiat conversion and withdrawal charges significantly outweighed the cheap blockchain transfers.

The study, which was published on July 30, found that on-chain transfers averaged only 0.4% of the amount sent. In contrast, total costs ranged from 0.3% for Italy-to-Argentina to 8.96% for Argentina-to-Italy. The high fees were largely due to fiat fees, with a 3.8% credit-card surcharge contributing to an overall cost of 8.95% in the UAE-to-Italy route.

The researchers noted that blockchain settlement was rarely the expensive part of the process. They also found that stablecoins like USDC can be cheaper than traditional remittance services, such as Wise, on certain routes. However, speed depended on local banking infrastructure, with transfers taking under 20 minutes where instant systems were available and up to two business days in other cases.

The study's authors cautioned that the results are limited to one stablecoin and a small set of jurisdictions, and that different tokens, operators, market structures, and regulations could produce different outcomes.