Central Bank of Italy: stablecin remittances cannot reliably reduce costs

New study by the Bank of Italy: The actual cost and speed of cross-border remittances of stablecoins are not always better than traditional methods.

A new study by the Bank of Italy challenges common assumptions about stablecoins in cross-border payments. Research points out that if the entire cost chain is taken into account, the use of stablecoins for remittances may not automatically outperform existing payment tracks in terms of cost and speed.

Researchers evaluated 200 USDC-denominated remittances involving 10 two-way payment channels connecting Italy with Brazil, Argentina, Japan, United Arab Emirates and South Africa. They compared end-to-end fees and settlement times with traditional remittance services and concluded that most of the fees and delays were caused by friction between fiat currency and gold channels, rather than blockchain execution itself.

Core found that

In the tested channels, conversion and currency conversion fees accounted for the majority of the total remittance costs, while blockchain transaction fees accounted for only a small portion. The total remittance cost of stablecoins varies by channel, ranging from 0.3% to nearly 9%, while in channels that support instant payment systems, the settlement time is usually less than 20 minutes. Compared to the World Bank's benchmark of 6.65% global average remittance cost, stablecoins have lower costs in most channels, but outperform Wise in only three out of seven comparable channels.

Research believes that improving domestic instant payment infrastructure and reducing reliance on reconversion into fiat may be more important than pure blockchain technology. Regulatory design also strongly affects where stablecin users trade, and overly strict regimes may push activities offshore or unregulated channels.

stablecoin remittances: Where exactly do the costs come from?

Research by the Bank of Italy tested 200 USDC remittance flows on 10 channels, aiming to capture actual friction on payment paths between Italy and several major regions. The researchers looked at the complete process-from conversion and routing to the deposit and withdrawal channels used to convert fiat currencies into stablecoins and back into fiat currencies-and then compared the results to traditional remittance services.

The report states that the largest portion of costs comes from conversion fees and currency conversions. Blockchain fees account for only a small portion of total remittance costs, weakening the idea that "using blockchain" in itself guarantees cheaper transfers. In other words, even if stablecoin transfers are settled quickly on the chain, the conversion steps required to convert funds into the recipient's available currency can dominate the total cost.

Judging from the range of costs observed in the experiment, the total cost of stablecoin remittances varies widely depending on the channel-ranging from as low as 0.3% to nearly 9%. This difference is important to investors and payment operators because it suggests that stablecoin remittances perform differently and rely heavily on the availability and pricing of local payment infrastructure and exchange services.

Speed depends on local payment track, not just settlement time

The study also measured end-to-end settlement times. For stablecin remittances, in channels that support instant payment systems, the transfer settlement time is less than 20 minutes. In channels without these systems, settlement takes one to two working days.

This finding is consistent with the broader logic of cross-border payments: On-chain settlement can be fast, but delivery is limited by the speed of down-chain steps-for example, how quickly funds can be credited to the account after the stablecoin link is completed. For users, this means that stablecoins are only likely to increase speed if the surrounding payment ecosystem can match the speed of blockchain components.

Comparison of stablecoins with global benchmarks and mainstream providers

To put the results in context, the Bank of Italy's report used the World Bank's global average remittance cost of 6.65% as a reference point. Compared to this benchmark, the stablecoin channels examined have lower costs in most cases. However, the comparison between the research and major providers is more nuanced.

The report found that of seven comparable channels, stablecoin transfers were cheaper than Wise on only three channels. This asymmetry is important: it suggests that remittances based on stablecoins may be lower on some routes than some traditional options, but will not continue to outperform competitive existing companies in all areas.

For traders and builders concerned about stablecoin adoption, this sends a clear message: Until the conversion and settlement ecosystem improves, stablecoin's performance is likely to depend on the specific route. The stablecoin track can reduce certain types of friction, but in practice they must be integrated into an efficient deposit and withdrawal system to translate into lasting advantages.

Infrastructure investment and direct use of stablecoins

Although research found that blockchain transaction costs are not the main cost driver, it believes that strategic investment in domestic instant payment infrastructure can enhance the competitiveness of cross-border payments based on stablecoins. The authors emphasize that settlement speed depends largely on the quality of the local payment track-therefore, improving the "last mile"(and the corresponding conversion process) may yield the greatest benefits.

The report also highlighted a structural bottleneck: stablecoins currently usually need to be reconverted into local fiat before they can be used by recipients. The report suggests that if stablecoins can be directly used in the real economy, their economic advantages will be significantly enhanced.

If stablecoins can be used directly in the real economy to pay for goods, services, rent or tuition fees without having to be reconverted into local fiat, transfers based on stablecoins will have higher economic advantages.

Regulation: Efficiency may be improved or disrupted by design

In addition to infrastructure and market mechanisms, research suggests that regulatory design also shapes remittance efficiency. In the Central Bank of Italy's framework, prohibitive regimes have not eliminated demand for stablecoins; instead, they may shift their use to offshore platforms and other unregulated channels. Conversely, overly strict frameworks can increase operational complexity for retail users, potentially offsetting any expected consumer protection.

The study comes as major jurisdictions are tightening or implementing frameworks for crypto assets and stablecoins. The European Union has implemented its Cryptocurrency Asset Markets (MiCA) framework, and the United States has enacted the GENIUS Act to regulate payments in stablecoins. As these regimes come into effect, the balance between compliance, accessibility, and the availability of regulated fiat channels may directly affect real-world remittance outcomes.

The broader stablecoin market context is also important. DeFiLlama data quoted in the article shows that the supply of stablecoins is approximately US$307 billion, an increase of approximately 16% over the past year. The increase highlights why policymakers and payment providers focus on operational and regulatory details-especially when it comes to remittances.

The next concern is whether regulatory changes and domestic payment infrastructure upgrades can reduce the conversion friction that the Central Bank of Italy study identified as the main cost and time drivers. If the use of stablecoins increasingly shifts to channels with strong instant payment tracks, and more "consumable" avenues emerge, the potential of stablecoins to outperform traditional remittance services may become clearer and more consistent across routes.