FinanceResearch from the Bank of Italy indicates that using stablecoins for remittances does not necessarily result in lower costs compared to traditional methods.

A recent experiment revealed that various fees associated with remittances often make stablecoin transactions as costly as conventional options.

By Jamie Crawley, AI Boost|Edited by Nikhilesh De Aug 1, 2026, 4:00 p.m. 3 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on (Unsplash)SummaryShow
  • The Bank of Italy investigated 200 USDC remittances across 10 different international corridors, finding total costs ranging from 0.3% to nearly 9% of the amount sent.
  • Transaction fees on the blockchain were a minor part of the overall expenses, whereas exchange fees, foreign exchange spreads, and local banking fees constituted the majority.
  • Researchers concluded that while stablecoins improve the speed of value transfer on-chain, they have not yet resolved the expensive "last mile" issue between cryptocurrency and local fiat currencies.
  • The Bank of Italy acknowledged that while stablecoins can lower costs in specific corridors, their constant availability for settlement and programmability provide significant advantages over traditional payment systems.

Stablecoins have long been promoted as a transformative solution for cross-border payments, claiming to offer quick transactions at significantly lower costs compared to traditional remittance services.

Although sending USDC through a blockchain can cost just a few cents a new study from the Bank of Italy indicates that this is not the reality for most users sending money home.

In their mystery-shopping study across 10 remittance corridors, researchers discovered that transfers using stablecoins were not consistently cheaper than traditional money transfer methods when considering the entire process from bank account to crypto wallet and back to local currency.

The report, released as Markets, Infrastructures and Payment Systems Paper No. 86, analyzed transfers of 200 USDC from Italy to various locations including Argentina, Brazil, South Africa, the UAE, and Japan.

The total costs varied significantly, from about 0.3% to nearly 9% of the transferred amount, depending on the corridor and the service providers involved. Additionally, settlement times varied widely, with some transactions taking around 20 minutes where domestic instant payment systems were available, while others required as much as two business days when conventional bank transfers were used.

Identified Challenges

It is somewhat expected for a central bank to highlight the limitations of stablecoins, given that traditional financial institutions may have a vested interest in downplaying their adoption. Digital currencies and blockchain were created to minimize the need for intermediaries, including central banks.

However, the researchers found that the blockchain itself was rarely the issue.

Gas fees on the network accounted for a minimal portion of the total cost. Instead, the highest expenses were incurred before and after the on-chain transaction: converting euros into USDC, cashing out into local currency, and the fees and spreads from exchanges and local banking systems.

This highlights a significant oversight within the industry.

Much of the promotion surrounding stablecoin remittances emphasizes the cost of transferring tokens across blockchain networks. On Layer-2 solutions and newer blockchains, moving digital dollars can cost under a cent.

However, users of remittances are not purchasing blockchain transactions; they are transferring funds between bank accounts, often in different currencies.

This distinction is crucial because stablecoins only exhibit their touted cost benefits when both the sender and receiver remain within the crypto ecosystem. If the recipient is willing to hold USDC, spend stablecoins directly, or transact with merchants that accept them, the blockchain transfer itself is indeed very affordable.

In practical scenarios, however, most recipients ultimately require local currency for expenses like rent, groceries, or utility bills. Each conversion between fiat and stablecoins introduces additional intermediaries—usually centralized exchanges, brokers, or payment providers—along with extra costs and foreign exchange markups.

Rather than completely eliminating intermediaries, the current stablecoin remittance landscape often substitutes traditional correspondent banks with a different set of middlemen.

This does not imply that the technology is ineffective.

The Bank of Italy notes that stablecoins can lower costs in certain corridors, while their continuous settlement capabilities and programmability remain significant advantages over older payment systems. The study simply posits that these advantages do not yet translate into consistently lower remittance costs when the complete payment process is taken into account.

The report also suggests potential pathways to realizing stablecoins' initial promise. As regulated off-ramp providers expand under frameworks like Europe's MiCA initiative and domestic instant payment systems become better integrated with digital asset infrastructure, competitive pressures could help reduce conversion fees. Nevertheless, foreign exchange spreads are likely to continue being a necessary aspect of international payments.

Currently, the research indicates that stablecoins have addressed the challenge of transferring value across blockchains. The more difficult—and costly—task remains ensuring that value reaches those who simply wish to spend it.

StablecoinsAI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk's full AI Policy.Latest Crypto News
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