Stablecoins Offer Speed for Remittances but Face Challenges in Local Spending

Remittances face hurdles at the checkout counter

Stablecoins are increasingly used to send money across borders, a process known as remittance. These digital tokens are designed to match the value of a currency like the U.S. dollar and move across a blockchain, which is a shared digital ledger. While the digital transfer happens almost instantly, the person receiving the money often faces a second, more difficult task: spending it.

Recipients may need to pay rent or buy groceries in their local currency. To do this, they must often convert the digital tokens back into cash or move them into a local bank account. This final step can take more time and effort than the original transfer.

Key findings on stablecoin transfers

• Stablecoin transfers are fast, but cashing out often requires a banking step that can take a full day.
• Total costs include both visible fees and hidden costs built into exchange rates.
• Using digital tokens can shift the technical burden and the work of finding cash access onto the recipient.
• Stablecoins allow recipients to hold dollars digitally and choose exactly when to convert them to local currency.

Bank of Italy study compares USDC and Wise costs

Research published by the Bank of Italy in July 2026 compared the cost of sending $200 using USDC, a popular stablecoin, against traditional services like Wise. The study looked at routes between Italy and Brazil. It found that the cheapest option changed depending on which way the money was moving.

When sending money from Italy to Brazil, Wise was cheaper with a cost of 2.20% compared to 2.70% for USDC. However, for transfers from Brazil to Italy, USDC was significantly cheaper at 2.21%, while Wise costs ranged between 4.68% and 4.89%. These figures show that the best method for a household depends on the specific countries and services available at both ends.

What is confirmed about using digital tokens for payments

It is a fact that a blockchain can confirm a transfer in seconds, but this does not mean the money is ready to spend immediately. The total speed of a remittance depends on the surrounding services, such as crypto exchanges or local payment systems. Some services might advertise low fees but offer poor exchange rates, resulting in the recipient receiving less money.

Additionally, stablecoins do not have the same protections as traditional banks. They generally lack deposit insurance. Holding these tokens also carries risks related to the company that issues them and the reserves they keep to back the token's value.

Why spending choices matter for families

The main advantage for many households is the ability to choose. Instead of a service provider forcing an immediate conversion to local currency, a recipient can keep a portion of the money in digital dollars. This can be useful for those who want to save in a more stable currency while only converting what they need for daily expenses.

However, this freedom comes with a trade-off. Recipients must be comfortable using crypto apps and understanding how to navigate digital wallets. For family members who prefer cash or are not familiar with the technology, receiving stablecoins can be more difficult than traditional methods.

Sources

• CryptoSlate