A recent study by the Bank of Italy tested common claims about cross-border remittances using stablecoins. The results showed that stablecoins did not consistently offer lower costs or faster transfers in all scenarios. The key factors determining user experience remain the deposit and withdrawal processes between fiat currency and stablecoins, and the efficiency of the recipient's local payment system.
Actual testing covered 10 remittance channels.
The study, published on July 30, included 10 remittance channels from Italy to Argentina, Brazil, South Africa, the UAE, and Japan. Instead of using models, researchers conducted a "mystery shopper" test, actually initiating a cross-border transfer of 200 USDC and recording the entire process from purchasing USDC to the recipient exchanging it back to their native currency.
The key to this approach is to include steps beyond on-chain transactions in the statistics. In other words, the study measures not just individual on-chain fees, but the total cost and time for a user from payment to receipt.
Total costs vary greatly
Research shows that the total transfer costs across the 10 channels ranged from 0.30% to nearly 9%, a significant difference. This result implies that stablecoin remittances do not offer a uniformly low-fee advantage; different country channels and service provider combinations will significantly impact the final cost.
More importantly, on-chain transfers themselves have a relatively small impact on the total cost. The real increase in fees comes from the process of converting Euros to USDC and then converting USDC back to local fiat currency at the receiving end, which involves intermediaries, exchange rate differences, compliance audits, and local bank channels.
- The test amount is 200 USDC.
- Covering 5 destination countries and 10 routes
- Total costs range from 0.30% to nearly 9%.
The speed of fund transfer depends on the local payment system.
Regarding arrival time, the study also failed to reach a consensus that "stablecoins are inherently faster." If the receiving location has a mature real-time payment system, the entire transfer can be completed within 20 minutes; if it still relies on ordinary bank transfers, the arrival time may be extended to 1 to 2 business days.
This means that on-chain settlement speed is not the primary factor determining the final arrival time of funds. What truly impacts the receiving experience is the final local clearing and withdrawal process.
- For channels with real-time payment systems, funds can arrive in less than 20 minutes.
- Relying on traditional bank transfer channels may take 1 to 2 business days.
The bottleneck is concentrated in the deposit and withdrawal process.
The Bank of Italy's research points out that the main friction points in stablecoin remittances are concentrated in the on-ramp and off-ramp stages, namely the purchase of stablecoins and the redemption of fiat currency. Even if blockchain transfers are fast enough and have low fees, it is difficult to improve the cost and timeliness of the entire remittance chain on its own.
The results show that markets with more mature local real-time payment infrastructure, such as Brazil and the UAE, are more likely to demonstrate the speed advantage of stablecoin remittances; while in channels with weaker local payment networks, this advantage is significantly weakened.
This study also illustrates that for stablecoins to gain a more stable competitive edge in cross-border remittance scenarios, the key is not only a faster public blockchain or lower gas fees, but also the construction of a smoother, more compliant, and lower-cost deposit and withdrawal network.
