Bank of Italy Study Finds Stablecoins Lack Consistent Remittance Cost Edge

The Bank of Italy found that stablecoin remittances do not provide a consistent cost advantage over traditional money-transfer providers in a recent study ^[1].

The findings challenge the common narrative that blockchain-based payments automatically lower the price of sending money across borders. While digital assets can reduce settlement times, the overall cost remains heavily dependent on how users move money between traditional bank accounts and digital wallets.

To reach these conclusions, the Bank of Italy tested 200 transfers using USDC ^[2]. The research examined 10 different payment corridors to determine if stablecoins could reliably reduce the cost and settlement time of cross-border remittances compared with traditional services ^[2], ^[3].

The study revealed a wide variance in the total cost of using stablecoins for these transfers. Total costs ranged from 0.3% to nearly nine percent ^[2]. This volatility suggests that the efficiency of a stablecoin transaction is not uniform across different regions or service providers.

According to the report, the primary drivers of these expenses are fiat on-ramps and off-ramps ^[1]. These are the services used to convert traditional currency into stablecoins and back again. The research indicates that these entry and exit points account for the majority of the total cost, offsetting the low fees associated with the actual blockchain transfer ^[1], ^[3].

While stablecoins can sometimes be cheaper than average remittance fees, the Bank of Italy said they do not consistently outperform traditional providers ^[3]. The results highlight a gap between the theoretical efficiency of distributed ledger technology and the practical reality of the current financial infrastructure.