A recent study by the Bank of Italy found that remittances using stablecoins, such as USD Coin (USDC), did not consistently outperform traditional payment channels in terms of cost or speed. The research highlighted that the primary sources of expense and delay were linked to fiat on- and off-ramp processes, rather than blockchain transaction fees.
Stablecoin vs. Traditional Remittance Tested
Researchers conducted 200 USDC remittance transactions across 10 payment routes connecting Italy with Brazil, Argentina, Japan, the United Arab Emirates, and South Africa. The study compared the costs and settlement times of these transactions with those of established remittance providers.
The analysis identified that most expenses stemmed from currency conversion and exchange fees during the on- and off-ramp stages, with blockchain fees making up only a minor portion of the overall cost. Total expenses for stablecoin transfers in the sample ranged from 0.3% to nearly 9%, depending on the specific payment corridor.
Settlement times for stablecoin payments were under 20 minutes in corridors where participants had access to instant payment systems. In corridors lacking such infrastructure, transfers took one to two business days, placing them on par with traditional channels in those regions.
| Payment Method | Cost Range | Settlement Time |
|---|---|---|
| Stablecoin (USDC) | 0.3% to 9% | <20 minutes (with instant rails); 1-2 business days (without) |
| Traditional Remittance | Global average 6.65% | Varies; up to 1-2 business days |
Using the World Bank’s global average remittance cost of 6.65% as a benchmark, stablecoin-based remittances proved more affordable across most corridors. However, when compared specifically with Wise, a fintech remittance provider, stablecoin transfers were only cheaper in three out of seven analogous corridors.
Infrastructure and Regulation Drive Results
The study emphasized that improvements to domestic instant payment systems could enhance the competitiveness of stablecoin-based cross-border payments. The researchers stated that settlement speed relied heavily on the availability and quality of local payment infrastructure.
Authors of the report argued that the most substantial benefits of stablecoin remittances may be realized if users can avoid converting stablecoins back into fiat currencies. They suggested that eliminating these conversion steps could minimize costs and processing times.
Prohibitive or overly restrictive regulatory frameworks do not eliminate stablecoin activity, but instead drive users toward offshore or unregulated platforms and increase complexity for retail participants, according to the authors.
The research further indicated that regulatory policies played a decisive role in shaping the efficiency of cross-border stablecoin transfers. The authors noted that strict bans or burdensome compliance rules often failed to suppress demand for stablecoins, diverting traffic to less-regulated markets.
The findings come as the European Union adopts the Markets in Crypto-Assets (MiCA) framework and the United States implements the GENIUS Act, both aiming to regulate crypto assets and payment stablecoins.
According to DeFiLlama, the stablecoin market has expanded to about $307 billion, marking a 16% increase over the past year.
Mini dictionary: GENIUS Act, short for “Guaranteeing Essential Nonbank Innovations for Upgrading Stablecoins,” is US legislation introduced to provide a regulatory framework for payment stablecoins, aiming to enhance oversight and consumer protection in the digital asset sector.
