A new study from the Bank of Italy challenges a common assumption about stablecoins in cross-border payments: using stablecoin transfers for remittances may not automatically deliver better economics or faster delivery than established payment rails once the full cost chain is considered.
Researchers evaluated 200 remittances denominated in USDC 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 by blockchain execution itself.
Key takeaways
- In the tested corridors, 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.
- Compared with the World Bank’s global average remittance cost benchmark of 6.65%, stablecoin transfers were cheaper in most corridors—but were cheaper than Wise in only three out of seven comparable corridors.
- The study argues that improvements to domestic instant payment infrastructure and reduced reliance on reconversion into fiat are likely to matter more than blockchain technology alone.
- Regulatory design strongly influences where stablecoin users transact, with overly restrictive regimes potentially pushing activity toward offshore or unregulated channels.
Stablecoin remittances: where the cost really comes from
The Bank of Italy study tested 200 USDC remittance flows across 10 corridors, designed to capture realistic friction across payment paths between Italy and several major regions. The researchers focused on the full journey—from conversion and routing through the on- and off-ramps used to turn fiat into stablecoins and back again—then compared results to traditional remittance offerings.
According to the report, the largest share of costs came from exchange fees and currency conversion. Blockchain fees represented only a small fraction of the total remittance cost, undermining the idea that “using a blockchain” by itself will guarantee cheaper transfers. In other words, even if the stablecoin transfer settles quickly on-chain, the conversion steps required to deliver value in the recipient’s usable currency can dominate the bill.
On the cost range observed in the experiment, total stablecoin remittance costs varied sharply by corridor—from as low as 0.3% to nearly 9%. That variability matters for investors and payment operators because it suggests that stablecoin remittance performance is not uniform; it depends heavily on the local availability and pricing of payment infrastructure and conversion services.
Speed depends on local payment rails, not just settlement time
The study also measured settlement times end-to-end. For stablecoin remittances, transfer settlement was reported as less than 20 minutes in corridors where instant payment systems were available. In corridors without those systems, settlement took one to two business days.
This finding is consistent with the broader logic of cross-border payments: on-chain settlement can be quick, but delivery is constrained by the speed of off-chain steps—such as how quickly funds can be credited to accounts after the stablecoin leg is completed. For users, that means stablecoins may improve speed only when the surrounding payment ecosystem can match the speed of the blockchain component.
How stablecoins compare to global benchmarks and mainstream providers
To contextualize the results, the Bank of Italy report used the World Bank’s global average remittance cost of 6.65% as a reference point. Against that benchmark, the stablecoin corridors examined were cheaper in most cases. However, the study’s comparison to major providers was more nuanced.
The report found that stablecoin transfers were less expensive than Wise in only three of seven comparable corridors. That asymmetry is important: it indicates that stablecoin-based remittances may undercut some traditional options in certain routes, but they do not consistently outperform competitive incumbents across the board.
For traders and builders watching stablecoin adoption, the implication is clear: performance will likely be route-specific until the conversion and settlement ecosystem improves. Stablecoin rails can reduce certain types of friction, but in practice they must be integrated into efficient on- and off-ramp systems to translate into sustained advantage.
Infrastructure investment and spending stablecoins directly
While the study found that blockchain transaction fees were not the primary cost driver, it argued that strategic investment in domestic instant payment infrastructure could improve the competitiveness of stablecoin-based cross-border payments. The authors emphasized that settlement speed depended heavily on the quality of local payment rails—so improving the “last mile” (and the corresponding conversion processes) is likely to yield the biggest gains.
The report also highlighted a structural bottleneck: stablecoins currently often require reconversion into local fiat to be usable by recipients. It suggested that meaningful economic advantages would increase if stablecoins could be spent directly in the real economy.
If stablecoins could be spent directly in the real economy, for goods and services, rents, or school fees, without reconversion into local fiat currency, the economic advantages of stablecoin-based transfers would be substantially higher.
Regulation: efficiency can improve or unravel depending on design
Beyond infrastructure and market mechanics, the study argued that regulatory design shapes remittance efficiency. In the Bank of Italy’s framing, prohibitionist regimes have not eliminated stablecoin demand; instead, they can redirect usage toward offshore platforms and other unregulated channels. Conversely, overly restrictive frameworks may increase operational complexity for retail users, potentially offsetting any intended consumer protections.
The study arrives as major jurisdictions tighten or implement frameworks for crypto assets and stablecoins. The European Union has implemented its Markets in Crypto-Assets (MiCA) framework, and the United States enacted the GENIUS Act, which is intended to govern payment stablecoins. As these regimes take effect, the balance between compliance, accessibility, and the availability of regulated fiat on- and off-ramps may directly affect real-world remittance outcomes.
The broader stablecoin market context also matters. DefiLlama data cited in the article places stablecoin supply at about $307 billion, up roughly 16% over the past year. That growth underscores why policymakers and payment providers are focused on the operational and regulatory details—especially where remittances are concerned.
What to watch next is whether regulatory changes and domestic payment infrastructure upgrades reduce the conversion frictions that the Bank of Italy study identifies as the dominant cost and timing drivers. If stablecoin usage increasingly shifts toward corridors with strong instant payment rails and if more “spendable” pathways emerge, the potential for stablecoins to outperform traditional remittance services may become clearer—and more consistent across routes.
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