Bank of Italy: Stablecoins Are Cheap—Until You Try to Actually Spend One 🚧

A Bank of Italy study has found that stablecoin-based remittances did not deliver a consistent cost or speed advantage over traditional payment channels, with fiat on- and off-ramp frictions accounting for most of the expenses and delays. Researchers tested 200 USDC (USDC) remittances across 10 bidirectional payment corridors linking Italy with Brazil, Argentina, Japan, the United Arab Emirates and South Africa, comparing end-to-end costs and settlement times against conventional remittance services. Exchange fees and currency conversion made up the bulk of total cost, while blockchain transaction fees represented only a small share.

Across the corridors examined, total costs ranged from 0.3% to nearly 9% depending on the destination, while transfers settled in less than 20 minutes where instant payment systems were available and one to two business days where they were not. Using the World Bank's reported global average remittance cost of 6.65% as a benchmark, the study found stablecoin transfers were cheaper in most of the corridors tested, though they were less expensive than Wise in only three of seven comparable corridors.

The study concluded that investment in domestic instant payment infrastructure could improve the competitiveness of stablecoin-based cross-border payments, noting that settlement times depended heavily on the quality of local payment rails. The authors wrote that the biggest gains may come when stablecoins no longer require conversion back into fiat currency: "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."

Regulation also shaped transfer efficiency. Prohibitionist regimes failed to fully suppress stablecoin demand and instead pushed users toward offshore platforms and other unregulated channels, while overly restrictive frameworks increased operational complexity for retail users. The findings come as the European Union's Markets in Crypto-Assets (MiCA) framework is in effect and the United States has enacted the GENIUS Act to govern crypto assets and payment stablecoins. The stablecoin market has grown to about $307 billion, up roughly 16% over the past year, according to DefiLlama data.