Stablecoins Solve On-Chain Speed but Not the Costly Last Mile, Bank of Italy Finds

Bank of Italy tested stablecoin remittances across ten corridors

Stablecoins have long been marketed as a cheaper, faster route for cross-border payments. New research from the Bank of Italy tests that claim and finds it does not consistently hold. Researchers ran a mystery-shopping exercise, sending 200 USDC across ten corridors that link Italy with Argentina, Brazil, South Africa, the United Arab Emirates and Japan. USD Coin (USDC) is a dollar-pegged stablecoin, a token built to hold a fixed value against the US dollar. The study measured the full journey, from a bank account into a crypto wallet and back into local currency.

Total costs ranged from 0.3% to almost 9%

End-to-end costs varied sharply across the ten routes. They ranged from roughly 0.3% to almost 9% of the value transferred, depending on the corridor and the service providers used. That spread shows stablecoin remittances hold no systematic cost advantage over conventional money transfer operators once the whole payment chain is counted.

On- and off-ramp fees drove most of the cost

The researchers found that the blockchain itself was rarely the problem. Network fees accounted for only a marginal share of the total cost. The largest expenses came before and after the transfer. These included converting euros into USDC, withdrawing funds into local currency, foreign exchange spreads, and charges from exchanges and domestic banks.

"On- and off-ramp frictions are the main source of cost and transfer duration.", July 2026. — Bank of Italy, "Are Stablecoins Efficient for Remittances?", Paper No. 86

Recipients still need local currency to spend

The gap comes down to who holds the money at the end. Stablecoins deliver their headline savings only when both sender and recipient stay inside the crypto system. Most recipients, however, need local currency to pay rent, buy food or settle bills. Every switch between fiat and stablecoins adds another intermediary, usually a centralised exchange or broker, along with more fees and currency markups.

Settlement times depended on local payment rails

Speed was as uneven as cost. Transfers cleared in under 20 minutes where domestic instant payment systems supported withdrawals. Where recipients relied on conventional bank transfers, the process stretched to one or two business days. The quality of each country's payment infrastructure, not the blockchain, set the pace.

USDC held its peg but the costly last mile remains

USDC stayed close to its target value during the period examined. The token traded at $0.9998 at the time of publication, with a market capitalisation near $71.97 billion (CoinPaprika, 2 August 2026). A stable token keeps the on-chain leg cheap, yet the fees sit at the fiat edges of the transfer. The Bank of Italy notes that stablecoins can reduce costs in specific corridors, and that always-on settlement and programmability remain advantages over legacy payment rails. Stronger domestic instant payment systems could improve their competitiveness. For now, stablecoins move value on-chain quickly but have not eliminated the costly last mile between crypto and local currency.

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