Bank of Italy Study Finds No Cost Advantage for Stablecoin Remittances
Vexoda Newsroom
A Bank of Italy study found that stablecoins do not offer a consistent cost or speed advantage over traditional remittance services, as fiat conversion costs and infrastructure frictions dominate expe
In a recent study, the Bank of Italy analyzed the cost efficiency of using stablecoins for international money transfers. The research tested 200 USDC-based remittances across various corridors linking Italy with Brazil, Argentina, Japan, UAE, and South Africa, comparing them to traditional payment methods.
The findings revealed that while blockchain transaction fees were relatively low compared to overall costs, exchange fees and currency conversion expenses made up the majority of transfer charges. Transfer times varied from under 20 minutes in corridors supporting instant payments to one or two business days where such systems were unavailable.
Despite being cheaper than traditional remittances in most tested corridors, stablecoins still faced significant competition from established services like Wise. The study highlighted that geographic and payment infrastructure design significantly influenced the efficiency of both types of transfers, with domestic instant payment systems potentially improving stablecoin competitiveness.
Regulatory frameworks also played a crucial role according to the research, with prohibitionist regimes driving users towards unregulated channels while overly restrictive policies increased complexity for retail users. The European Union’s MiCA and the U.S.’s GENIUS Act are cited as examples of evolving regulatory landscapes impacting remittance efficiency.
The study suggests that stablecoins could offer greater economic advantages if they were directly spendable in real-world transactions without needing to be converted back into local fiat currency, indicating a potential shift towards more integrated digital payment ecosystems.
Traders and investors should monitor the development of domestic instant payment infrastructure and regulatory policies closely as these factors will likely shape future trends in stablecoin remittances.
Source: Cointelegraph. Summarized and rewritten by the Vexoda Newsroom. This is market news, not financial advice.