Bank of Italy Stablecoin Report: Hidden Costs Rise to 9%

A new study conducted by the Bank of Italy has revealed that the use of stablecoins for international money transfers is not always cheaper than traditional methods, and that costs increase particularly during fiat currency conversion processes.

Cross-border payments, cited as one of the strongest use cases for cryptocurrencies, have come under the scrutiny of the Bank of Italy. The study published by the bank, titled “Markets, Infrastructures and Payment Systems Paper No. 86,” used a “mystery shopper” method to test whether stablecoin transfers are as low-cost as claimed. In this experiment covering 10 different corridors, including Argentina, Brazil, South Africa, the United Arab Emirates, and Japan, 200 USDC (USDC) transfers were sent from Italy.

Research results proved that total transfer costs varied widely, ranging from 0.3% to 9% of the amount sent. The surprising point was that the main expense did not stem from network fees on the blockchain—the technical transfer cost. While network fees accounted for a negligible portion of the total cost, it was determined that the primary financial burden emerged during the phases of moving from Euro to USDC and then converting back to the local currency (on-ramp and off-ramp).

Hidden Costs Are Concealed in Conversion Processes

The stablecoin ecosystem, which set out with the promise of eliminating intermediaries in the traditional banking system, encounters different intermediary institutions in the real world. When users want to convert money into local currency to pay their rent or go shopping instead of keeping it in a crypto wallet, exchanges, payment providers, and exchange rate spreads come into play. This situation makes it difficult for stablecoin remittances to establish a systematic cost advantage over traditional operators.

Despite this, the report does not argue that the technology is a total failure. It is anticipated that these costs could decrease as legal frameworks like Europe’s MiCA regulation evolve and local instant payment systems integrate with digital asset infrastructure. Connections reflecting complex data flows between global financial networks show that while the technology maintains its speed and accessibility advantages, a more transparent conversion process is needed for economic efficiency.