What to Know

  • The Bank of Italy tested 200 USDC remittances across 10 international payment corridors.
  • Total end-to-end costs ranged from 0.3% to almost 9% of the amount sent, depending on the corridor and providers used.
  • The corridors included transfers from Italy to destinations such as Argentina, Brazil, South Africa, the UAE and Japan.
  • Blockchain transaction fees represented only a tiny part of the total cost.
  • Exchange fees, foreign exchange spreads and local banking charges accounted for most of the expense.
  • Settlement times ranged from around 20 minutes to as long as two business days.
  • The findings suggest stablecoins can move value quickly on-chain but still face costly fiat on-ramp and off-ramp challenges.
  • The Bank of Italy also noted that stablecoins can reduce costs in specific corridors and retain advantages such as always-on settlement and programmability.

Stablecoin Remittance Claims Meet a Full-Cost Test

Stablecoins have long been presented as one of crypto’s most practical answers to cross-border payments, especially for remittances. The basic proposition is simple: a sender converts money into a digital dollar such as USDC, moves it across a blockchain quickly, and the recipient converts it into local currency. In theory, that process can bypass slow legacy payment rails and reduce the fees associated with international money transfers.

New testing by the Bank of Italy complicates that picture. In a mystery-shopping exercise covering 10 international payment corridors, the central bank found that stablecoin-based transfers were not systematically cheaper than traditional money transfer methods once the full end-to-end journey was included. The test tracked transfers of 200 USDC from Italy to destinations including Argentina, Brazil, South Africa, the UAE and Japan.

The key issue is not the blockchain transfer itself. Moving USDC across a network can be extremely cheap, particularly on newer blockchains and Layer-2 systems where transaction fees may be minimal. But ordinary remittance users do not experience a transfer as a blockchain transaction alone. They usually begin with a bank account or local fiat balance, convert that money into a stablecoin, send it, and then require the recipient to cash out into local currency.

That wider chain introduces costs that are easy to overlook in marketing claims. The Bank of Italy found that total costs ranged from 0.3% to almost 9% of the value transferred, depending on the corridor and the service providers used. That is a wide spread, and it shows why simple comparisons between blockchain gas fees and remittance fees can be misleading.

The Blockchain Was Rarely the Expensive Part

One of the most notable findings is that network fees accounted for only a tiny fraction of the overall cost. This is an important distinction for the crypto industry because it shows that stablecoins may be efficient at doing what blockchains are designed to do: move tokens from one address to another. The problem appears mainly at the edges of the system, where digital assets must be converted into and out of fiat currencies.

The largest expenses came from exchange fees, foreign exchange spreads and local banking charges. These costs can arise when the sender buys USDC, when the recipient sells USDC for local currency, or when either side relies on a bank account, payment app, broker or exchange to complete the transfer. In some corridors, those layers can make the final cost look much less disruptive than the headline promise of nearly free crypto transfers.

For many users, the last mile is the real remittance product. A recipient often needs money in a form that can be used immediately for rent, groceries, transport, medical bills or utility payments. If merchants and households in a given market do not widely accept stablecoins directly, the recipient must convert the tokens into local currency. Each conversion creates room for fees and markups.

This helps explain why stablecoins may deliver large benefits in some circumstances but fail to produce consistent savings across all corridors. If both sender and recipient remain inside the crypto ecosystem, or if the recipient can hold and spend USDC directly, the blockchain leg can be fast and cheap. If the payment must ultimately end in a bank account or local cash balance, the traditional financial system still plays a major role.

Settlement Speed Still Matters

Cost is not the only factor in remittances. Speed, reliability, availability and user experience also matter. The Bank of Italy found that settlement times varied significantly, ranging from around 20 minutes in cases where domestic instant payment systems supported withdrawals to as long as two business days when recipients relied on conventional bank transfers.

That range highlights both the promise and the limitation of stablecoin infrastructure. On-chain transfers can settle around the clock, without waiting for banking hours or cross-border correspondent networks. However, if either side of the transfer depends on a bank or domestic payment system, the final timing may still reflect the limits of those systems.

Always-on settlement remains a meaningful advantage for stablecoins. A token transfer can be initiated outside normal banking windows, and settlement on the network does not depend on the operating hours of a particular bank. Programmability is another advantage. Stablecoins can be embedded in smart contracts, automated treasury systems and other digital finance applications in ways that conventional remittance products typically cannot match.

Still, the Bank of Italy’s findings suggest that these advantages do not automatically translate into lower total prices for retail remittance users. The on-chain component may be efficient, but the complete consumer journey still depends on access points, exchange liquidity, compliance processes and domestic banking connectivity.

The Last Mile Remains the Hardest Problem

The phrase “last mile” is central to understanding stablecoin remittances. In digital asset markets, it refers to the step where crypto value becomes spendable local money. That step can be more complicated than the blockchain transfer because it requires local financial partners, bank accounts, liquidity, identity checks and compliance with domestic rules.

In many markets, stablecoin liquidity is deep enough for digital traders but not yet seamless for ordinary remittance recipients. A person receiving money may not want to manage a crypto wallet, compare exchange spreads or wait for a bank withdrawal. They may simply want a local-currency balance they can use immediately. Until that experience becomes cheaper and simpler, stablecoins may struggle to consistently beat established remittance providers on end-to-end cost.

There is also the matter of foreign exchange. International remittances often involve movement between currencies. Even when a stablecoin represents a digital dollar, a recipient in another country may need pesos, reais, rand, dirhams, yen or another local currency. That conversion typically comes with a spread. Competitive markets can narrow spreads, but they may not disappear entirely.

As a result, stablecoin remittances do not necessarily eliminate intermediaries. In many cases, they replace one set of intermediaries with another. Instead of correspondent banks and traditional transfer operators, users may rely on centralized exchanges, brokers, wallet providers, payment gateways and local bank rails. Those actors can provide valuable services, but they also need to cover operating costs and compliance obligations.

Regulation and Competition Could Shift the Economics

The cost picture may change as infrastructure develops. The Bank of Italy noted that stablecoins can reduce costs in specific corridors, which suggests the model is not uniformly weak. In routes where on-ramps and off-ramps are efficient, exchange liquidity is strong and domestic payment systems support fast withdrawals, stablecoins may offer a more competitive alternative.

Regulatory frameworks such as Europe’s MiCA regime may also shape the market by creating clearer rules for stablecoin issuers and service providers. Greater regulatory clarity can encourage more compliant infrastructure, broader institutional participation and more competition among providers. If more regulated off-ramp providers enter the market, fees for conversion and withdrawal could come under pressure.

Domestic instant payment systems are another important factor. When local rails support quick withdrawals, the recipient experience can improve significantly. The Bank of Italy’s testing showed that settlement could be as quick as around 20 minutes where domestic instant payment systems supported withdrawals. When conventional bank transfers were required, the process could take as long as two business days.

This means the future of stablecoin remittances may depend less on the blockchain alone and more on how well crypto infrastructure connects with local payment systems. The most competitive models are likely to be those that combine low-cost token transfers with efficient fiat conversion and rapid local disbursement.

A More Nuanced View of Stablecoins

The findings do not mean stablecoins have failed as a payments technology. They show that the economics of remittances are broader than gas fees. Stablecoins can move digital value quickly and continuously, but users care about the total amount delivered to the recipient in usable money.

For the crypto sector, the message is practical. Stablecoin adoption in remittances will likely depend on reducing friction at the on-ramp and off-ramp, improving transparency around total fees, and making local-currency access easier for recipients. The blockchain transaction may already be efficient, but the complete transfer must compete with traditional operators on cost, speed and convenience.

For consumers, the takeaway is equally direct. A stablecoin remittance may be cheaper in some corridors and under some provider combinations, but it is not automatically cheaper just because the blockchain fee is low. The full comparison should include exchange fees, foreign exchange spreads, withdrawal charges and the time needed for the recipient to access spendable funds.

FXCOINZ views the Bank of Italy’s testing as a reminder that real-world payment innovation is measured at the user level, not at the protocol level alone. Stablecoins have made major progress in moving value on-chain. The next test is whether the surrounding infrastructure can make that value cheaper and easier to use in everyday financial life.

Frequently Asked Questions (FAQs)

What did the Bank of Italy test?

The Bank of Italy tested stablecoin remittances by tracking 200 USDC transfers across 10 international payment corridors from Italy to destinations including Argentina, Brazil, South Africa, the UAE and Japan.

Were stablecoin remittances always cheaper?

No. The testing found that stablecoin-based transfers were not systematically cheaper than conventional money transfer operators once the full process from fiat to crypto and back to local currency was included.

How much did the USDC remittances cost?

Total end-to-end costs ranged from 0.3% to almost 9% of the amount transferred, depending on the corridor and the service providers used.

Were blockchain fees the main cost?

No. Blockchain transaction fees represented only a tiny share of the total cost. The larger expenses came from exchange fees, foreign exchange spreads and local banking charges.

Why can stablecoin remittances become expensive?

They can become expensive when users must convert fiat into USDC, send the token, and then convert USDC back into local currency. Each step may involve intermediaries, fees and currency spreads.

How fast were the transfers?

Settlement times varied widely. Some transfers took around 20 minutes where domestic instant payment systems supported withdrawals, while others took as long as two business days when conventional bank transfers were involved.

Do stablecoins still have advantages for payments?

Yes. Stablecoins can offer always-on settlement, programmability and potentially lower costs in specific corridors. Their advantages are strongest when on-ramps, off-ramps and local payment systems are efficient.

What is the main challenge for stablecoin remittances?

The main challenge is the last mile between crypto and local fiat currency. Many recipients need spendable local money, and converting stablecoins into that form can add cost and delay.

Could stablecoin remittance costs fall over time?

They could fall if regulated off-ramp providers expand, competition increases and domestic instant payment systems become more closely integrated with digital asset infrastructure.

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