Sending money across borders via stablecoins isn’t necessarily cheaper, despite popular belief. The Bank of Italy ran a mystery-shopping test involving 200 USDC transfers from Italy to various countries like Argentina, Brazil, South Africa, UAE, and Japan. Their findings reveal that total costs can range anywhere from 0.3% to nearly 9% of the amount sent, depending largely on the corridor and service providers chosen.
While blockchain transfer fees themselves are minimal often just a few cents the bigger expenses come from exchange fees, foreign exchange spreads, and charges imposed by local banks. These traditional financial frictions add layers of cost that stablecoins haven’t yet overcome in the “last mile” of sending money from crypto to local currencies.
Stablecoins offer speed, but costs vary widely
Settlement speed varied significantly in the study too. Some corridors benefitted from domestic instant payment systems, allowing money to arrive in about 20 minutes. Other routes relied on standard bank transfers that could take up to two business days. The Bank of Italy noted that while stablecoins don’t always lower remittance fees, their programmability and 24/7 settlement abilities remain valuable compared to legacy systems.
These findings challenge the longstanding narrative that stablecoins are a clear-cut solution to expensive cross-border payments. They highlight that while blockchain technology can speed up the movement of value, the surrounding infrastructure such as exchanges and banking rails still heavily influences overall costs. For someone sending money home regularly, that can mean fees and delays aren’t as drastically improved as expected.
This content is for informational purposes only and does not constitute financial advice.
