Banca d’Italia: Stablecoins give little remittance benefit

Banca d’Italia concluded in a recent analysis that stablecoins currently offer little cost or speed advantage for cross-border remittances compared with existing payment channels. The central bank examined the full remittance process to compare on-chain settlement with the full sequence of steps that move funds between sender and recipient.

The bank found that fast settlement on a blockchain is only one element in a longer value chain. Converting fiat to a stablecoin and back, finding local fiat liquidity for a particular token, running anti-money‑laundering and know‑your‑customer checks, and using local payout partners all affect total fees and end‑to‑end transfer times.

Fees charged by exchanges and on‑ and off‑ramp services often offset any savings from on‑chain settlement. Where market liquidity for a stablecoin is thin in recipient countries, exchange spreads can widen. Intermediary controls and compliance checks add processing steps, and congestion or variable settlement finality on some public blockchains can create timing and operational risks.

The paper highlighted remittance corridors in which recipients rely on cash pickup or mobile wallets and do not have full access to bank accounts. In those cases, senders who convert funds into a stablecoin still depend on local partners to convert tokens into local currency and deliver cash or wallet credit, reintroducing costs and delays similar to those faced with correspondent banks and money transfer operators.

Banca d’Italia identified narrow circumstances in which stablecoins could reduce costs or speed transfers, such as transactions between well‑integrated market participants or where local fiat liquidity for a given stablecoin is abundant. The report noted those situations are not yet widespread.

The analysis also set out regulatory and risk issues tied to broader stablecoin use for payments: operational and custody risks at issuers and intermediaries, potential market impact from concentrated issuer networks, and cross‑border compliance challenges. The paper recommended clearer rules on issuer governance, greater transparency about reserve assets, and stronger supervisory cooperation across jurisdictions.

“The use of stablecoins for remittances does not currently translate into clear cost or speed improvements once off‑chain elements are considered,” the report said.

The bank described remittances as a large, distributed flow of funds involving banks, payment service providers, money transfer operators and local payout agents. The report said broader integration of rails, more liquid local markets for tokens and coordinated regulation would be needed for wider use of stablecoins in remittances.