Conversion Fees Erode Stablecoin Savings
A recent study from the Bank of Italy has cast doubt on the assumption that stablecoins offer a consistently cheaper alternative for international remittances.
End-to-end costs for these stablecoin-based remittances ranged widely: from as little as 0.3% to nearly 9% of the value transferred, depending on both the payment corridor and choice of service providers. This variability means that any potential savings can be quickly erased by unfavorable exchange rates or high withdrawal fees.
No Systematic Edge Over Banks
On paper, stablecoins promise fast and borderless payments. Yet in practice, the Bank of Italy’s findings suggest there is no systematic cost or speed advantage over traditional banking channels. For example, while the World Bank pegs the global average remittance cost at 6.65%, stablecoin transfers were only reliably cheaper in some corridors—and less expensive than fintech giant Wise in just three out of seven comparable routes.
The largest portion of remittance expenses came not from technology but from financial intermediaries handling currency conversion and fiat withdrawals.
According to coindesk.com, settlement times also failed to deliver a clear win for stablecoins: transfers settled in under 20 minutes where instant payment systems existed, but could take up to two business days elsewhere. This means that users hoping for rapid settlement might be disappointed if local banking rails are slow or fragmented.
See Also
Only Cheaper Within Crypto Ecosystem
The study highlighted a critical micro-contrast: when both sender and recipient remain inside the crypto ecosystem—never converting funds back to fiat—costs drop dramatically. In these cases, blockchain transaction fees become almost negligible compared to traditional remittance costs. However, once either party needs to convert digital assets into local currency, exchange fees and spreads quickly inflate the total expense.
This finding underscores a significant limitation for migrant workers or families who rely on remittances for daily expenses: unless they can spend directly in crypto (which is rare outside certain markets), much of the supposed savings evaporate during off-ramping.
Settlement Times Hinge on Local Rails
Settlement speed—a key selling point for digital assets—proved highly dependent on local infrastructure. Where instant payment systems were available in destination countries, funds could arrive in under 20 minutes after initiating a transfer. In corridors lacking such systems, recipients waited between one and two business days for their money to clear. This wide range shows that blockchain efficiency alone does not guarantee faster access to funds; local banking networks remain a bottleneck.
The stablecoin market itself has grown rapidly over the past year, reaching about $307 billion according to DefiLlama data—a 16% increase—but this scale has not yet translated into universal savings or speed improvements for cross-border workers sending money home.
The Snapshot
- •The Bank of Italy study found stablecoin remittance costs ranged from 0.3% to nearly 9% for 200 USDC transfers.
- •Stablecoin transfers were cheaper than Wise in only 3 of 7 corridors and not consistently faster than banks.
- •Most remittance costs came from euro-to-USDC conversion and fiat withdrawals, not blockchain fees, per Paper No. 86.
Next steps
If future Bank of Italy research papers or updates provide comparative data on remittance costs using new stablecoin providers or corridors, and these show end-to-end costs consistently below the World Bank’s 6.65% benchmark, this would immediately signal a measurable cost advantage; otherwise, the lack of systematic savings remains unconfirmed.
