Stablecoins Offer No Systematic Edge Over Traditional Remittances, Bank of Italy Study Finds

Cost Range Comparison

Settlement Times

Transfers settled in under 20 minutes in corridors where instant payment systems were available on both ends. In corridors lacking instant payment rails, settlement stretched to one or two business days—a timeline indistinguishable from traditional wire transfers.

Why It Matters

The findings arrive as the stablecoin market has grown to approximately $307 billion, representing roughly 16 percent growth over the past year. Proponents have long argued that stablecoins could disrupt the remittance industry by bypassing correspondent banking networks and reducing fees. This research complicates that narrative.

The study matters for three key audiences:

• Regulators: Both the European Union's Markets in Crypto-Assets (MiCA) framework and the United States' GENIUS Act now govern stablecoin issuance and use. The Bank of Italy's findings suggest that regulatory design—particularly around fiat on- and off-ramps—will determine whether stablecoins can deliver on their cost-reduction promise.
• Fintech builders: Companies building stablecoin remittance products must focus on reducing fiat conversion friction and integrating with instant payment systems rather than optimizing blockchain transaction costs.
• Migrants and remittance senders: For individuals sending money across borders, the research clarifies that stablecoins are not automatically cheaper. The corridor matters as much as the technology.

Payment Infrastructure Remains the Bottleneck

The study concluded that investment in domestic instant payment infrastructure could materially improve the competitiveness of stablecoin-based cross-border payments. Settlement times depended heavily on the quality of local payment rails in both the sending and receiving countries.

In corridors where both endpoints had instant payment systems—such as Italy's integration with the European instant payment network and certain systems in the UAE—stablecoin transfers settled in minutes. In corridors lacking instant payment infrastructure, the stablecoin advantage evaporated, with settlement times stretching to match traditional bank transfers.

The researchers argued that the most significant gains would materialize when stablecoins no longer require conversion back into fiat currency:

If stablecoins could be spent directly in the real economy, for goods and services, rents, or school fees, without reconversion into local fiat currency, the economic advantages of stablecoin-based transfers would be substantially higher.

This vision—sometimes called "stablecoin-native commerce"—remains largely theoretical. Outside a small number of crypto-friendly merchants and niche online services, stablecoins cannot be used directly for everyday purchases in most jurisdictions. Until that changes, the fiat off-ramp remains a necessary and costly step.

How Regulation Shapes Efficiency

The study found that regulatory design played a major role in determining transfer efficiency. Prohibitionist regulatory regimes—those that ban or heavily restrict stablecoin use—failed to fully suppress demand. Instead, such policies pushed users toward offshore platforms and unregulated channels, often increasing costs and risks.

On the other end of the spectrum, overly restrictive frameworks that impose cumbersome verification, reporting, or capital requirements increased operational complexity for retail users and service providers, slowing adoption and raising costs.

The implication: a "Goldilocks" regulatory approach—clear rules that protect consumers without banning innovation or imposing prohibitive compliance burdens—may be critical to unlocking stablecoins' potential in the remittance market.

Both the EU's MiCA framework and the U.S. GENIUS Act represent attempts at this balanced approach, though their real-world impact remains to be fully assessed. The Bank of Italy study provides a baseline against which future regulatory experiments can be measured.

What's Next

Several open questions emerge from the research:

• Will instant payment infrastructure expand? The study suggests that countries investing in instant payment systems (such as Brazil's PIX or India's UPI) could see stablecoin remittances become more competitive. Tracking infrastructure rollout in the five countries tested—Brazil, Argentina, Japan, the UAE, and South Africa—will be a key indicator.
• Can fiat on-ramp and off-ramp costs be reduced? Competition among exchanges and payment processors could drive down conversion fees. Regulatory clarity may also encourage new entrants.
• What happens as stablecoin acceptance grows? If merchants, landlords, schools, and service providers begin accepting stablecoins directly, the need for fiat conversion diminishes. Pilot programs in remittance-heavy corridors (such as Mexico-U.S. or Philippines-Middle East) could test this hypothesis.
• How will MiCA and GENIUS Act enforcement play out? The study's findings on regulatory design suggest that implementation details—licensing requirements, reserve standards, and interoperability mandates—will matter as much as the headline rules.

Frequently Asked Questions