Bank of Italy Study: Stablecoins Lack Systematic Edge in Remittances

A study by the Bank of Italy has challenged the industry narrative that stablecoins inherently reduce the cost and time of international money transfers. The research concludes that stablecoin-based remittances do not offer a systematic advantage over traditional payment channels.

To reach these conclusions, the central bank conducted a "mystery shopping" exercise involving 200 USDC transfers across 10 bidirectional payment corridors. These corridors linked Italy with Brazil, Argentina, Japan, the UAE, and South Africa. The findings revealed a wide variance in pricing, with total costs for stablecoin remittances ranging from 0.3% to nearly 9% depending on the specific corridor. While these figures were often lower than the World Bank's global average remittance cost of 6.65%, the stablecoin method was less expensive than the fintech service Wise in only three of seven comparable corridors.

The Last-Mile Bottleneck

The research highlights that the primary drivers of cost are not blockchain transaction fees, but rather the "last mile" of the process. The bulk of expenses were attributed to fiat on- and off-ramp frictions, exchange fees, and currency conversion. Speed was similarly dependent on legacy infrastructure rather than the blockchain itself; settlement times were under 20 minutes only where instant payment systems existed, while transfers took one to two business days in regions without such systems.

Industry Implications

This data provides a critical reality check for the $307 billion stablecoin market, arriving as the European Union implements the Markets in Crypto-Assets (MiCA) framework and the United States enacts the GENIUS Act. The results suggest that the efficiency of a distributed ledger is effectively negated by inefficient fiat gateways. For the industry, this implies that the true value of stablecoins for remittances will remain elusive unless users can spend digital assets directly in the real economy—such as for rent or services—without converting back to local currency.

Future Outlook

Bank of Italy researchers noted that the economic advantages of these transfers would be "substantially higher" if stablecoins could be used for goods, services, or school fees without reconversion into fiat. Until such a shift in merchant adoption occurs, the study suggests that stablecoins will continue to struggle to consistently outperform established fintech competitors in the remittance space.