Bank of Italy Finds Stablecoin Remittances Don’t Always Cut Costs

Contrary to popular belief, a new Bank of Italy study shows stablecoin remittances are not consistently more affordable than traditional money transfer methods, as exchange, foreign exchange, and banking fees often negate blockchain savings.

What Happened

Researchers from the Bank of Italy conducted a mystery-shopping experiment to assess the true cost and speed of sending money internationally via stablecoins. They tracked 200 USDC remittances along 10 corridors from Italy to destinations such as Argentina, Brazil, South Africa, the UAE, and Japan. The study, published as Markets, Infrastructures and Payment Systems Paper No. 86, meticulously documented every step, from funding a bank account to converting back into local fiat currency. While blockchain transaction fees remained negligible, the bulk of transfer expenses were attributed to exchange fees, foreign exchange spreads, and local banking charges necessary to move crypto into usable local funds.

Full end-to-end costs fluctuated significantly, from as low as roughly 0.3% to almost 9% of the amount sent, depending heavily on the destination and service providers used. Settlement was rapid on-chain, ranging from 20 minutes to as long as two business days, dictated largely by the speed of local banking systems and fiat withdrawal rails. The researchers concluded that while stablecoins efficiently enable instant value movement on-chain, they fall short in streamlining the costly connection—the ‘last mile’—between crypto assets and local currencies required for practical use.

Why It Matters

This research calls into question the long-standing narrative that stablecoins are a disruptive force for reducing global remittance costs. Although sending USDC directly on blockchain is remarkably cheap, the realities of crypto-to-fiat conversions introduce persistent, and sometimes hidden, expenses. The promise of stablecoin remittances as a universally cheaper solution is unfulfilled in many corridors, undermining its core value proposition for cross-border workers and families who rely on affordability.

From a broader perspective, the findings highlight the need for innovation beyond blockchain technology itself—specifically in making fiat onramps and offramps both accessible and affordable. Analysts note that incumbent financial providers, with their entrenched banking and currency exchange networks, retain leverage over critical cost centers. Until more frictionless and competitive service pathways emerge, stablecoins’ advantages may remain limited to speed and programmable settlement, rather than cost leadership.

Key Takeaways

• End-to-end stablecoin remittance costs depend mainly on exchange, FX, and banking fees.
• The speed advantage of stablecoins is meaningful, but not matched by consistent cost reductions.
• The ‘last mile’—converting crypto to local fiat—remains the major barrier to cheaper transfers.
• Traditional providers may retain a pricing edge in some corridors due to cost bottlenecks outside the blockchain.

What’s Next

The market will be watching whether new solutions emerge to lower ‘last mile’ costs—either through fintech innovation, improved on/off-ramps, or regulatory efforts to drive competition among service providers. Analysts will be monitoring if stablecoins can evolve beyond speed to deliver meaningful cost savings in remittance-heavy corridors, and whether incumbent banking systems will adapt or resist this pressure. Until then, users evaluating international transfers should consider total end-to-end costs before deciding between crypto and traditional methods.

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