$USDC Remittances Not Necessarily Cheaper Than Traditional Money Transfer Operators

The Bank of Italy has published a study on stablecoin-based remittances, finding that they are not necessarily cheaper than traditional money transfer operators. The researchers conducted a mystery-shopping exercise across 10 international remittance corridors, sending $USDC from Italy to destinations including Argentina, Brazil, South Africa, the UAE, and Japan.

The study found that end-to-end costs varied dramatically, ranging from 0.3% to almost 9% of the value transferred depending on the corridor and service providers used. Settlement times also differed widely, from around 20 minutes for domestic instant payment systems to as long as two business days for conventional bank transfers.

The researchers found that network gas fees accounted for only a negligible share of the total cost. Instead, the largest expenses came before and after the on-chain transfer: converting euros into $USDC, withdrawing funds into local currency, foreign exchange spreads, and fees charged by exchanges and domestic banking networks.