Bank of Italy Study Finds No Systematic Cost or Speed Advantage for Stablecoin Remittances
A comprehensive study by the Bank of Italy has demonstrated that stablecoin-based remittances do not consistently outperform traditional payment channels in terms of cost or speed. This challenges common assumptions about the inherent efficiencies of blockchain-enabled cross-border payments and highlights the complex interplay between fiat conversion costs, payment infrastructure, and regulatory factors that influence the real-world viability of stablecoin remittances.
No Consistent Cost or Speed Benefit: Stablecoins vs. Traditional Remittance Channels
The study tested 200 USDC transactions across 10 bidirectional corridors linking Italy with countries such as Brazil, Argentina, Japan, the United Arab Emirates, and South Africa. These tests revealed that stablecoin remittance costs varied widely—from as low as 0.3% to nearly 9% depending on the corridor—undermining the notion of uniform cost efficiency. Transfer speeds also depended heavily on local payment system infrastructure: where instant payment systems existed, settlement was typically under 20 minutes; otherwise, the process took one to two business days.
When benchmarked against the World Bank’s reported global average remittance cost of 6.65%, stablecoin costs were sometimes lower but not consistently so. Moreover, stablecoin transfers were cost-competitive with established remittance services like Wise in only a minority of payment corridors. This indicates that stablecoins do not automatically guarantee cheaper or faster cross-border payments without considering local payment ecosystems.
| Metric | Stablecoins (USDC) | Traditional Channels (Wise, Average) |
|---|---|---|
| Cost Range | 0.3% to nearly 9% | Global average 6.65%, Wise more expensive except in 3/7 corridors |
| Settlement Speed (instant systems) | Under 20 minutes | Usually within hours to a day |
| Settlement Speed (non-instant) | 1 to 2 business days | 1 to 3 business days |
| Geographic Scope | 10 corridors spanning Italy to various countries | Global, more mature but dependent on corridor |
The study also reveals that the main drivers of cost and timing differences are fiat conversion costs and payment infrastructure, not blockchain fees, which are relatively minor in the overall remittance process.
Real-World Factors Limit Stablecoin Efficiency Beyond Blockchain Technology
This research underscores that blockchain and stablecoin advantages have limits imposed by off-chain realities. While blockchain offers transparency, programmability, and potential decentralization, the actual user experience hinges heavily on fiat on- and off-ramps, local payment rails, and regulatory environments.
The cost variability—ranging from below 1% to almost 9%—reflects volatile fiat conversion fees and differing banking and payment ecosystems in recipient countries. For example, less developed payment infrastructures or banking monopolies in certain markets can significantly increase costs and cause delays that blockchain settlement speed alone cannot overcome.
Regulation is another critical factor. The study found that prohibitionist regulatory regimes failed to suppress stablecoin demand, instead pushing users toward offshore and less regulated platforms which may increase risk and reduce transparency. Conversely, overly restrictive frameworks raised operational complexity for retail users, impeding mainstream stablecoin adoption for remittances.
Key Regulatory and Operational Challenges Affecting Stablecoin Remittances
The landscape of stablecoin remittances is shaped not only by technology but also by jurisdictional regulatory design:
- Regulatory regimes like the GENIUS Act in the U.S. govern crypto assets and payment stablecoins, aiming to bring compliance and consumer protection.
- Restrictive or prohibitionist regulation can inadvertently create demand for offshore stablecoin platforms outside official oversight, undermining regulatory goals.
- Overly complex compliance requirements increase friction, discouraging retail users who seek simple, low-cost money transfer solutions.
This raises the question of whether stablecoins, as currently regulated and integrated, can realistically disrupt established cross-border payment channels without greater harmonization of fiat infrastructure and clearer regulatory frameworks.
Comparing Stablecoin and Traditional Remittance Channels: Cost & Speed Trade-offs
| Feature | Stablecoin Remittances | Traditional Payment Systems |
|---|---|---|
| Cost Variability | Highly variable (0.3% - 9%) depending on corridor | Relatively stable, typically higher average >6% globally |
| Speed | Instant (where infrastructure exists), else 1-2 days | Often 1-3 business days |
| Infrastructure Dependence | Heavily reliant on fiat on-/off-ramps and local payment systems | Established, but variable by region |
| Regulatory Compatibility | Fragmented; regulatory uncertainty increases risks and complexity | Generally well-understood, but slower to innovate |
| User Experience | Depends on blockchain wallet and fiat conversion ease | User familiarity is high |
| Risk Profile | Regulatory grey areas can push users offshore | Better understood but slower and sometimes costlier |
This table demonstrates that stablecoins’ core technological advantages—speed and transparency through blockchain settlement—are dampened by external factors. In many corridors, robust fiat infrastructure and mature remittance incumbents continue to provide comparable or even superior user experience.
Soken’s Insight: The Importance of Holistic Security and Infrastructure in DeFi Payments
From our experience auditing Web3 protocols at Soken, stablecoins and decentralized exchanges offer powerful primitives for efficient value transfer in theory, but practical remittance efficiency hinges on comprehensive infrastructure integration and regulatory clarity. Blockchain fee optimization alone cannot overcome sluggish fiat conversion and compliance friction. Designing DeFi payment solutions requires a holistic approach that includes not only smart contract security but also seamless fiat conversion, UX simplicity, and regulatory harmonization to truly compete with traditional remittance corridors.
Moreover, decentralized exchange (DEX) security becomes increasingly relevant as remittance users may utilize DEXs to convert between on-chain assets and stablecoins. Vulnerabilities or inefficiencies at the DEX layer can materially degrade the cost and speed benefits expected from the underlying blockchain rail.
Next Steps for DeFi Security & Payment Innovation
This Bank of Italy study highlights the need for the Web3 and DeFi ecosystem to:
- Focus on improving fiat on-ramp and off-ramp solutions with cost-effective liquidity provisioning and regulatory-compliant workflows.
- Work closely with regulators to develop balanced frameworks that foster innovation while protecting retail users, avoiding blanket prohibitions or overly complex compliance.
- Enhance decentralized exchange protocols and payment smart contracts to reduce operational complexity and cost burdens for users.
- Promote interoperability between blockchain settlement layers and real-world payment infrastructure to unlock stablecoins’ speed benefits consistently across corridors.
As DeFi security researchers and developers, aligning smart contract audits with a broader systems perspective—spanning infrastructure and compliance—is crucial. Soken’s expertise in auditing DeFi protocols and integrated Web3 payment solutions offers pathways for projects aiming to mitigate these real-world operational bottlenecks while maintaining robust security postures.
By analyzing empirical remittance data in light of real-world constraints, the Bank of Italy study dispels simplistic narratives about blockchain-driven cost savings and speedups. Embracing complexity and focusing on practical integration between decentralized finance and traditional financial systems will be key to realizing stablecoins’ promise in cross-border remittances. Teams advancing Web3 payments should prioritize holistic solutions addressing fiat conversion, regulatory clarity, and user experience—not just blockchain efficiency—to compete effectively with incumbent remittance services.
Readers interested in exploring how secure infrastructure and legal compliance frameworks can maximize the potential of stablecoin remittances may find it useful to delve into Soken’s offerings on DeFi security audits, regulatory compliance consulting, and crypto asset ecosystem mapping. Our broader research hub also regularly analyzes evolving intersections among DEX vulnerabilities, payment protocols, and regulatory impact to help clients anticipate risks and innovate sustainably (/hub/).
This analysis underscores that technology alone does not guarantee breakthrough efficiencies in financial services—the operational context, regulatory design, and user experience are equally vital dimensions shaping the future of cross-border payments.