A Bank of Italy experiment across 10 international payment routes revealed that transferring $200 in stablecoins can cost anywhere from $0.60 (0.30%) to nearly $18 (nearly 9%), driven predominantly by currency conversion and withdrawal fees rather than blockchain network transaction charges.
High On-Ramp and Off-Ramp Friction Limits Remittance Efficiency
Although blockchain network execution costs remain minimal, conversion costs at the entrance and exit points eat into recipient payouts. Infrastructure provider BVNK, which was acquired by Mastercard, reported in a survey that freelancers, gig workers, and marketplace sellers now receive roughly 35% of their income via stablecoins. However, converted payouts face significant spreads when moving into traditional bank accounts to pay real-world expenses like rent.
As stablecoins dominate digital payments, the World Bank reported a Q3 2025 global average remittance cost of 6.36%, alongside a 3.54% index for digital-only money transfer operators. While low-cost stablecoin corridors easily beat traditional banking costs, high-friction corridors exceed digital MTO benchmarks. Institutional validation is expanding, highlighted by events such as Moody's granting RLUSD an investment-grade rating, yet retail liquidation charges remain restrictive.
Industry Leaders Target UX and Regulatory Clarity
Speaking at TOKEN2049, Taylor Bossung, Head of Corporate Affairs at RedotPay, noted that while physical and virtual crypto cards now enable spending across 130 million merchants, cash withdrawals for major purchases remain inefficient due to costly fiat ramps. Bossung suggested clear regulatory frameworks could allow ramp providers to negotiate better institutional rates and pass savings down to end users.
Simultaneously, KAST CEO Raagulan Pathy emphasized simplifying the user experience to mirror Web2 applications, allowing consumers to send funds directly to phone numbers without managing gas tokens or complex wallet addresses.
Key Takeaways
- Bank of Italy findings show moving $200 via stablecoins costs between $0.60 (0.30%) and $18 (9%) across 10 corridors.
- Gig workers and freelancers receive 35% of earnings in stablecoins, according to BVNK.
- World Bank Q3 2025 data pegs traditional remittance fees at 6.36% and digital-only MTO fees at 3.54%.
- RedotPay cards support 130 million merchants, but large off-ramp transfers still incur heavy spreads.
Why It Matters
The friction in stablecoin payments has shifted entirely from blockchain network throughput to local banking integration. Until exchange spreads and off-ramp banking charges drop below competitive digital transfer rates, stablecoins will serve primarily as holding assets rather than seamless end-to-end payroll solutions. Regulatory progress and deeper liquidity integrations between fintech ramps will be essential to achieving true cost parity.
