Bank of Italy research finds stablecoin remittance costs range from 0.3% to 9% across international corridors
A Bank of Italy study analyzing 200 USDC remittances across 10 corridors reveals that end-to-end costs range from 0.3% to nearly 9%. While blockchain network fees are negligible, often costing under a cent, the 'last mile' conversion into local fiat currencies introduces expensive intermediaries, exchange fees, and foreign exchange spreads. Settlement times vary from 20 minutes to two days. Future integration with domestic instant payment systems and Europe's MiCA framework may help lower these conversion costs.
Bank of Italy remittance study
▪A Bank of Italy study tracked 200 USDC remittances across 10 international payment corridors in a mystery-shopping exercise.
▪The Bank of Italy study found that end-to-end stablecoin remittance costs ranged from 0.3% to almost 9% of the transferred value.
▪Settlement times for the tracked stablecoin remittances varied from 20 minutes to two business days depending on the withdrawal method.
Last-mile conversion costs
▪Converting stablecoins to fiat currency replaces traditional correspondent banks with new intermediaries like centralized exchanges, brokers, and payment providers.
▪Stablecoin remittances face a costly 'last mile' challenge when converting digital tokens back into local fiat currencies for real-world use.
Exchange fees dominate expenses
▪The largest expenses in stablecoin remittances come from converting euros to USDC, withdrawing funds, and foreign exchange spreads.
▪Exchange fees, foreign exchange spreads, and local banking charges account for the bulk of stablecoin remittance expenses.
Blockchain transaction fees negligible
▪Transferring digital dollars on Layer-2 networks and newer blockchains can cost less than one cent.
▪Blockchain network gas fees represent a negligible share of the overall costs associated with stablecoin remittances.
Stablecoin regulatory integration outlook
▪Integrating domestic instant payment systems with digital asset infrastructure could help lower stablecoin conversion fees in the future.
▪The proliferation of regulated off-ramp providers under Europe's Markets in Crypto-Assets regime may increase competitive pressure and narrow conversion fees.
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