Stablecoins aren't always cheaper for sending money home, a central bank finds

Sending “digital dollars” across a blockchain can cost a fraction of a cent, but that is not what most people end up paying to send money abroad. A new Bank of Italy study tested 200 USDC transfers across 10 international routes and found the real, end-to-end cost ranged from about 0.3% to nearly 9% — often no cheaper than a traditional money-transfer service.

Stablecoins are crypto tokens designed to hold a steady value, usually pegged to a currency like the U.S. dollar. USDC is one of the largest. For years they have been pitched as a faster, cheaper way to send remittances — the money that workers send back to family in another country.

The researchers ran a “mystery shopping” experiment, sending 200 USDC from Italy to places including Argentina, Brazil, South Africa, the UAE and Japan. The blockchain part was indeed almost free: network fees were a negligible share of the total. The expense came before and after the transfer — converting euros into the stablecoin, cashing out into local currency, exchange-rate spreads, and fees charged by crypto exchanges and local banks. Settlement times ranged from about 20 minutes to two business days.

In other words, stablecoins only deliver their headline savings when both the sender and the receiver stay inside the crypto system. But most families ultimately need local cash to pay rent or buy groceries, and every swap between regular money and crypto adds another middleman. Instead of removing the intermediaries, today's stablecoin transfers often just replace the old banks with new ones.

The study is not a verdict that the technology failed. The Bank of Italy noted that stablecoins can be cheaper on certain routes, and that their around-the-clock settlement is a genuine advantage. As regulated “off-ramps” grow under Europe's new crypto rules, conversion fees could shrink — though exchange-rate spreads will probably never fully disappear.

For a beginner, the lesson is simple: the cheap-sounding “less than a cent” figure describes only one step of the journey. Before using any stablecoin service to send money, add up the full cost — the buy, the cash-out, and the exchange rate — and compare it with what a normal transfer would charge. Sometimes crypto wins; often it doesn't yet. This is information, not advice.