Stablecoins are frequently pitched as a faster, cheaper alternative to traditional remittance channels, but a new study from the Bank of Italy suggests the cost advantage is far less consistent than the pitch implies. The research, published as Markets, Infrastructures and Payment Systems Paper No. 86, ran a mystery-shopping experiment sending 200 USDC transfers across 10 international remittance corridors from Italy to Argentina, Brazil, South Africa, the UAE, and Japan.
The results showed end-to-end costs ranging from as little as 0.3% of the transferred value to almost 9%, depending heavily on which corridor and which service providers were used. That's a wide enough spread to undercut any blanket claim that stablecoins are simply cheaper than conventional transfer methods.
Where the Costs Actually Come From
Perhaps the most striking finding is where the expense concentrates. Blockchain gas fees, the cost most people associate with crypto transactions, turned out to represent only a negligible portion of the total. The real cost drivers were far more mundane: converting euros into USDC, foreign exchange spreads, fees charged by exchanges and brokers, domestic banking network charges, and the fees involved in withdrawing funds back into local currency at the destination.
In other words, the blockchain leg of the journey was cheap and fast. It was the traditional financial infrastructure bracketing that leg, the on-ramp and the off-ramp, that ate up most of the cost.
Speed Told a Similarly Mixed Story
Settlement times varied just as widely as costs. The fastest transfers, those paired with domestic instant payment systems on the receiving end, settled in around 20 minutes. But transfers that relied on conventional bank transfers to complete could take up to two full business days, eroding much of the speed advantage stablecoins are supposed to offer over legacy remittance rails.
A More Nuanced Verdict Than 'Stablecoins Win'
The Bank of Italy researchers didn't dismiss stablecoins outright. They acknowledged that stablecoins can reduce costs in specific corridors and offer genuine advantages in always-on settlement and programmability that traditional rails can't easily match. But their central conclusion was more measured than the industry's typical marketing: stablecoins "solve the speed of moving value on-chain but have yet to eliminate the costly 'last mile' between crypto and local fiat currencies."
For remittance providers and users alike, the findings point to a specific bottleneck to solve. The blockchain portion of a cross-border stablecoin transfer already works about as well as advertised. It's the conversion into and out of local currency, the part still handled by conventional financial intermediaries, where costs remain stubbornly comparable to the old system stablecoins were meant to disrupt.
