Key facts
- Stablecoin remittances do not offer a systematic cost or speed advantage over traditional payment channels.
- Fiat on- and off-ramp frictions accounted for the majority of costs and transfer delays in stablecoin remittances.
- Blockchain transaction fees represented a small share of the total costs for stablecoin transfers.
- Settlement times for stablecoin remittances were heavily dependent on the quality of local payment infrastructure.
- Prohibitionist regulatory regimes for stablecoins push users toward offshore and unregulated platforms.
A study by the Bank of Italy has concluded that stablecoin-based remittances do not consistently offer a cost or speed advantage over traditional payment methods. Researchers analyzed 200 USDC remittances across ten payment corridors connecting Italy with Brazil, Argentina, Japan, the United Arab Emirates, and South Africa. The findings indicate that the primary drivers of cost and delays were not blockchain transaction fees, but rather the expenses and time associated with converting fiat currency to stablecoins and back again (on- and off-ramps).
The study revealed that total costs for stablecoin remittances varied significantly, ranging from 0.3% to nearly 9%, depending on the specific payment corridor. Settlement times were generally swift, under 20 minutes when instant payment systems were utilized, but extended to one to two business days otherwise. While stablecoin transfers were found to be cheaper than the World Bank's global average remittance cost of 6.65% in most tested corridors, they were only less expensive than the remittance service Wise in three out of seven comparable routes.
The researchers emphasized the critical role of payment infrastructure, suggesting that improvements in domestic instant payment systems could enhance the competitiveness of stablecoin cross-border payments. They posited that the most substantial economic benefits of stablecoins would be realized if they could be spent directly in the real economy without conversion back to fiat currency.
Furthermore, the study highlighted the influence of regulatory frameworks on remittance efficiency. It noted that overly restrictive regulations can hinder operational complexity for retail users, while prohibitionist approaches fail to eliminate demand, instead driving users to unregulated offshore platforms. These findings emerge as the EU implements its Markets in Crypto-Assets (MiCA) framework and the U.S. enacts the GENIUS Act, both aimed at governing crypto assets and payment stablecoins.