Bank of Italy: No consistent cost edge for stablecoin remittances

A study from the Bank of Italy has challenged a common argument for crypto payments: that stablecoin-based remittances automatically deliver lower costs and faster settlement than traditional money transfer rails. After testing remittances funded and settled with USDC across multiple corridors, the researchers found that most of the expense and delay came from fiat conversion and payment-rail frictions—factors that blockchain networks alone do not control.

The findings are based on experiments moving 200 USDC across 10 bidirectional corridors connecting Italy with Brazil, Argentina, Japan, the United Arab Emirates, and South Africa. The study compared the end-to-end cost and settlement time to traditional remittance services, concluding that crypto network fees made up only a small portion of overall costs.

Key takeaways

• Fiat on- and off-ramp frictions dominated remittance costs: exchange fees and currency conversion accounted for most expenses, while blockchain transaction fees were comparatively minor.
• Speed depended on local payment rails: transfers settled in under 20 minutes where instant payment systems were available, but took one to two business days when they weren’t.
• Cost advantages were corridor-specific: total costs across stablecoin remittances ranged from 0.3% to nearly 9%, with savings versus some benchmarks not universal.
• Regulatory design influenced user behavior and efficiency: overly restrictive rules increased operational complexity, while prohibitionist approaches pushed users toward offshore and unregulated options.

Stablecoins don’t eliminate the biggest frictions

The Bank of Italy’s experiment was designed to isolate where the money-transfer pipeline spends time and money. Researchers reported that, across the stablecoin remittances tested, exchange fees and currency conversion were the primary cost drivers. By contrast, blockchain transaction fees were only a small share of total costs—meaning the core bottlenecks for cross-border transfers largely sit outside the chain.

In practical terms, the corridor matters because stablecoin remittances often still require converting value into local currency at the sending and receiving ends. Even when the transfer occurs on-chain, users may face fees and processing delays at the interfaces where fiat enters or leaves the system.

Costs and settlement times vary by corridor

According to the study, total costs for the stablecoin remittances ranged from 0.3% to nearly 9%, depending on the corridor. This wide spread underscores that stablecoin-based transfers are not a single “set it and forget it” alternative to traditional remittances; rather, they are shaped by the quality and pricing of the surrounding payment infrastructure.

Settlement times showed an even clearer relationship with local payment systems. The researchers found transfers were typically completed in less than 20 minutes when instant payment networks were available. Where those systems were not in place, settlement stretched to one to two business days.

To frame the results against a broader global benchmark, the study used the World Bank’s reported global average remittance cost of 6.65%. On that basis, stablecoin transfers were cheaper in most corridors examined. However, they were less expensive than Wise in only three of seven corridors where direct comparisons were possible—suggesting that established digital remittance providers can still outperform stablecoin routes in certain environments.

Why infrastructure investment matters more than token choice

The Bank of Italy argues that improving the competitiveness of stablecoin-based cross-border payments depends heavily on payment-rail upgrades—particularly domestic instant payment infrastructure. In other words, the study’s central implication is that stablecoin settlement can be fast only if the start and end points of the transfer process are equally efficient.

The authors also emphasized an important structural point: the potential benefits expand if stablecoins can be used in the real economy without repeated reconversion into local fiat. They wrote that:

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.

This framing highlights a key asymmetry in many cross-border use cases today. Even if blockchain rails reduce settlement friction, remittance economics can remain constrained when end users ultimately need local currency access and the process requires multiple conversions.

Regulation can either enable or complicate real-world use

The study also found that regulatory design plays a decisive role in shaping remittance efficiency. According to the authors, prohibitionist regimes have not fully eliminated stablecoin demand; instead, they can push users toward offshore platforms and other unregulated channels. Conversely, overly restrictive frameworks may increase operational complexity for retail users.

The analysis arrives as policy frameworks for crypto assets and stablecoins are taking shape in major jurisdictions. The European Union has implemented the Markets in Crypto-Assets (MiCA) framework, while the United States has enacted the GENIUS Act, which governs crypto assets and payment stablecoins, respectively.

In terms of broader market momentum, the stablecoin market has grown to about $307 billion, up roughly 16% over the past year, according to DefiLlama data on stablecoins.

That growth provides context for why regulators and payment operators are increasingly focused on remittance and tokenized payments. But the Bank of Italy’s results suggest that the route to efficiency is not purely about allowing stablecoin settlement—it’s also about aligning regulatory expectations with workable payment flows and infrastructure.

What readers should watch next

The study implies that the next meaningful improvements in stablecoin remittances will likely come from upgrades to instant payment rails and from reducing the need for repeated fiat conversion at either end of the transfer. Investors and builders should monitor how policy changes under MiCA in Europe and the GENIUS framework in the US translate into compliant on- and off-ramp experiences—because, according to the Bank of Italy, that’s where most of the cost and delay still lives.