A new study from the Bank of Italy has cast doubt on one of the most frequently cited use cases for stablecoins, finding no consistent cost advantage when using them for cross-border remittances compared with traditional payment methods.
What the Research Found
Researchers at Italy's central bank examined the real-world costs and settlement times associated with sending money across borders using stablecoins. Their conclusion challenges the popular narrative that blockchain-based transfers are automatically cheaper and faster than conventional channels.
According to the findings, the low transaction fees advertised on many blockchain networks tell only part of the story. Once users need to convert stablecoins back into local fiat currency, the accompanying charges frequently erase any savings gained during the on-chain portion of the transfer.
The blockchain fee is rarely the problem — it's the on-ramps and off-ramps that quietly eat the savings.
The study emphasized that the expense of moving between digital tokens and traditional money, along with the underlying payment infrastructure, accounted for most of the variation observed in both costs and settlement speeds. In other words, the bottlenecks lie at the edges of the system rather than within the blockchain itself.
Why It Matters for Remittances
Remittances are widely promoted as a killer application for stablecoins, particularly for migrant workers sending funds home to developing economies where banking fees can be steep. The Bank of Italy's analysis suggests that the promise of dramatic savings may be overstated once the full journey of a payment is taken into account.
The findings point to several factors that shape the true cost of a stablecoin remittance:
- Fiat conversion fees at both the sending and receiving ends
- The efficiency and reach of local payment infrastructure
- Access to reliable exchange services in the destination country
For policymakers and industry participants, the research underscores that improving remittance economics will require more than cheaper blockchain transactions. Building out accessible, low-cost conversion points and interoperable payment rails may prove far more decisive in determining whether stablecoins can deliver on their cost-saving potential.