Analysis of USDC Cross-Border Transfer Costs by Bank of Italy
The Bank of Italy recently published a practical study examining the costs associated with using the USDC stablecoin for cross-border remittances. The analysis covered 10 real-world transfer corridors connecting Italy with Argentina, Brazil, South Africa, the UAE, and Japan. Although on-chain blockchain transaction fees were relatively low, total transfer expenses ranged between 0.3% and almost 9%, showing no substantial cost savings compared to conventional remittance services.
Fiat Conversion and Deposit Fees Drive Most Costs
The report highlighted that major expenses arise from depositing funds into accounts, converting between fiat and stablecoin, and withdrawal processes. Blockchain transaction fees accounted for only about 0.4% of overall costs. For instance, remittances from the UAE to Italy encountered nearly 9% total fees, largely because senders could not use bank transfers and had to rely on credit card funding with an extra 3.8% charge. This scenario underscores that stablecoin transfers still heavily depend on the traditional banking framework, limiting potential cost reductions.
Stablecoin Fees Lack Consistent Edge Over Traditional Providers
When compared to the World Bank’s global average remittance cost of 6.4%, USDC’s total fees did not demonstrate a clear advantage across multiple corridors. The Bank of Italy also benchmarked USDC against established providers like Wise, finding USDC cheaper on some routes but costlier on others. This inconsistency challenges claims that stablecoin channels universally offer sustainable cost benefits.
Transfer Speed Hinges on Local Payment Infrastructures
The study further found that cross-border settlement times largely depend on the robustness of domestic payment systems. In countries with instant payment solutions such as Brazil’s Pix and the Eurozone’s TARGET Instant Payment Settlement, transfers completed in as little as 20 minutes. However, in nations lacking instant systems, like South Africa, stablecoin-based transfers still took one to two business days, comparable to traditional bank wire transfers.
Regulatory Landscape Critical for Stablecoin Adoption
The report acknowledged global efforts to regulate stablecoins, highlighting the European Union’s Markets in Crypto-Assets (MiCA) regulation as a particularly comprehensive framework. The Bank of Italy’s findings advocate a cautious stance on the ability of stablecoins to materially streamline cross-border remittances at present. It stressed that technological benefits are constrained by existing financial infrastructure and regulatory settings. Investors and market participants should closely follow stablecoin-related cost structures and regulatory developments when assessing their applicability in international payment flows.