Bank of Italy Sends 200 USDC in Study, Finds No Cost Advantage Over Remittances

Crypto News

A new mystery shopping study from the Bank of Italy, Italy's central bank, has concluded that USD Coin (USDC), a prominent altcoin stablecoin, offers no systematic cost advantage over traditional remittance channels. The central bank dispatched 200 USDC across ten real-world corridors linking Italy with Argentina, Brazil, South Africa, the United Arab Emirates, and Japan. Total transfer costs varied from 0.3% to nearly 9% of the amount sent, straddling the United Nations' target of reducing remittance costs below 3% by 2030. The researchers tracked five phases of each transfer, from funding an exchange account to withdrawing cash at the destination, and found that the on-chain blockchain transfer itself averaged just 0.4% of total cost. Instead, funding, currency conversion, and withdrawal—steps still mediated by banks and exchanges—accounted for almost all of the expense. A UAE-to-Italy transfer exemplified the problem: the sender lacked a bank transfer option and had to fund via credit card, incurring a 3.8% surcharge that lifted the total cost to nearly 9%. The World Bank's data puts the global average remittance cost at 6.4%, well above the UN's target, but against country-specific benchmarks, stablecoins beat traditional costs in every corridor except the UAE. Yet when the Bank of Italy compared USDC against money transfer operator Wise on the same routes, stablecoins were cheaper on three corridors and more expensive on four, undercutting any claim of a consistent edge. The study's authors argue that the technology still relies on the very banks it aims to bypass, a point reinforced by the fact that the most expensive routes were those with the most friction on the fiat on-ramp, not on the blockchain itself. The study also noted that the on-chain transfer cost was negligible, but the total cost is dominated by the fiat perimeter.

Execution times varied as widely as costs, according to the central bank's study. Transfers settled in under 20 minutes wherever instant payment systems such as Brazil's Pix network or the euro area's TARGET Instant Payment Settlement (TIPS) were available. In South Africa, however, the lack of such infrastructure meant a stablecoin transfer took one to two business days—the same timeline as a conventional bank wire. The Bank of Italy also reviewed global stablecoin rules, naming Europe's Markets in Crypto-Assets Regulation (MiCA) among the more comprehensive regimes, and a related review of the post-MiCA European crypto-asset market, which includes many altcoins, found that Circle remains the dominant compliant stablecoin issuer. But strict regulation carried its own cost: the study found that Japan's rules pushed users toward unregulated wallets rather than curbing demand, suggesting that overly stringent on-ramp requirements can drive activity off the radar. The researchers also noted that the infrastructure of domestic payment systems determines whether stablecoin transfers achieve speed advantages; where fast rails exist, stablecoins can be near-instant, but in their absence, they are no faster than a wire. This highlights that the innovation potential of stablecoins is contingent on the existing financial plumbing, not an inherent property of the token.

The Bank of Italy's findings provide a sober, data-driven counterpoint to the hype around stablecoin adoption. The study, based on a controlled mystery-shopping exercise, shows that the efficiency of USDC—or any stablecoin—is not inherent to the blockchain but heavily dependent on the surrounding fiat on-ramp and off-ramp infrastructure, unlike the theoretical appeal of algorithmic stablecoins. As policymakers in Europe and beyond refine frameworks like MiCA, this primary-source evidence underscores that cost and speed bottlenecks reside in traditional financial rails, not the chain itself. The results suggest that stablecoin efficiency can only improve when regulators and payment providers tackle fiat conversion and withdrawal friction, rather than focusing solely on the token layer. Even as airdrop distributions grab headlines, the real-world challenge for stablecoins is the mundane infrastructure of banking—a reminder that the road to mainstream adoption runs through the legacy financial system. The Japan case further illustrates that regulatory stringency, without corresponding on-ramp improvements, can push users outside the regulated ecosystem, a lesson central banks will need to weigh as they design digital currency frameworks. The study's methodology, which tracked real transactions, offers a template for other central banks to assess stablecoin viability. This is crucial as remittance costs remain a significant burden for developing economies.