Stablecoins Are Solving a Different Problem Than Expected

According to a study published by the Bank of Italy and new market data from South Korea's Financial Supervisory Service, stablecoins are increasingly succeeding where investors value market access but continue facing structural limitations in everyday cross-border payments.

Summary:

A Bank of Italy study found stablecoins do not consistently outperform traditional payment providers for cross-border remittances.
Fiat conversion – not blockchain settlement – remains the largest source of cost and delays.
Meanwhile, South Korea recorded an 18th consecutive month of net stablecoin outflows as investors moved capital to offshore crypto platforms.
The contrast suggests stablecoins are proving more effective at moving capital than replacing existing payment networks.

Bank of Italy Finds Blockchain Isn’t the Main Cost

The Bank of Italy conducted a “mystery shopping” exercise involving 200 USDC transfers across 10 payment corridors connecting Italy with Brazil, Argentina, Japan, the United Arab Emirates and South Africa.

Rather than measuring blockchain performance in isolation, researchers evaluated the complete transfer process from sender to recipient.

The study found that onchain transaction fees represented only a small share of total costs. Instead, the largest expenses and delays occurred when users converted local currencies into stablecoins and later exchanged them back into fiat, making on- and off-ramp services the primary source of friction.

Key Findings

Transfers tested: 200 USDC transactions
Payment corridors: Italy and five international markets
Transfer costs: Between 0.3% and nearly 9%
Settlement times: Under 20 minutes where instant payment systems existed, up to two business days elsewhere
Comparison: Lower than the World Bank’s average remittance cost, but cheaper than Wise in only three of seven comparable corridors

The researchers concluded that stablecoins become significantly more competitive only when recipients can spend them directly without converting back into local currency.

South Korea Highlights a Different Use Case

The latest figures from South Korea’s Financial Supervisory Service, cited by The Korea Times, illustrate a very different application of stablecoins.

The country’s five largest cryptocurrency exchanges recorded 560.3 billion won (approximately $400 million) in net stablecoin outflows during June, extending a streak of 18 consecutive months of net withdrawals.

Rather than facilitating remittances, those stablecoins have increasingly been used to transfer capital onto offshore trading platforms that offer products unavailable under South Korea’s domestic regulatory framework, including leveraged derivatives, tokenized real-world assets and decentralized finance services.

The trend has prompted growing political discussion over whether domestic restrictions are encouraging capital to migrate abroad instead of remaining within regulated local markets.

The Same Technology Is Solving Different Problems

Taken together, the two developments illustrate that stablecoin adoption is being driven by different economic incentives depending on how the assets are used.

For remittances, the blockchain itself is no longer the principal bottleneck. The cost of moving between fiat currencies and digital assets continues to determine whether transfers are competitive with established payment providers.

For capital markets, however, that friction appears less important. Investors have shown they are willing to absorb conversion costs when stablecoins provide faster access to international exchanges, leveraged products or investment opportunities unavailable in their domestic markets.

The comparison suggests stablecoins may currently deliver their greatest economic value as financial infrastructure connecting global markets rather than as a universal replacement for traditional cross-border payment systems.

The Next Stage Depends on Reducing Fiat Dependence

The Bank of Italy’s findings also point to where the industry’s next efficiency gains are likely to emerge.

As merchants, financial institutions and payment providers expand direct stablecoin acceptance, users may increasingly be able to complete transactions without repeatedly converting between fiat currencies and digital assets. Until that ecosystem matures, stablecoins are likely to remain strongest as infrastructure for moving capital globally, while their advantages for everyday remittances will continue to depend largely on the efficiency of local financial systems rather than blockchain technology alone.

The information presented in this article is intended for informational purposes only and should not be interpreted as financial, investment, or trading advice. Coinspress.com does not promote or advocate for any particular investment strategy, asset, or cryptocurrency project. Cryptocurrency markets are highly volatile and unpredictable – always perform your own research and seek guidance from a qualified financial professional before making any investment decisions.

Author

Alexander Zdravkov

Reporter at CoinsPress

Alexander Zdravkov is a market analyst and crypto journalist with interests in economics, broader financial markets and digital assets. His journey into crypto began more than four years ago, driven by a fascination with the rapid evolution of blockchain technology and the transformative potential of decentralized finance. He began analyzing market cycles and identifying emerging trends before they reach the mainstream. He holds a degree in International Relations - a background that helped shape his broader perspective on global economics, geopolitics, and the interconnected nature of modern financial markets. Whether covering the latest developments in the crypto sector or exploring broader macroeconomic themes, Alexander focuses on giving readers context rather than simply repeating headlines. During his career, he has authored more than 10,000 articles covering cryptocurrencies, traditional finance, and global market developments. His work spans everything from Bitcoin and altcoins to macroeconomic trends influencing risk assets worldwide.