The Hidden Price of Digital Money: IMF Reveals What Really Drives Stablecoin Transfer Costs

An IMF study finds that stablecoins can reduce cross-border transfer costs to an average of 2.18%, compared with traditional remittance services, but exchange fees and banking charges remain major barriers. The findings highlight the need for affordable banking access, transparent pricing and effective regulation to deliver cheaper international payments for consumers, traders and businesses.

The International Monetary Fund (IMF), through researchers from its Monetary and Capital Markets Department, has examined whether stablecoins can make international money transfers cheaper, faster and more accessible than traditional financial services. Published in October 2026, the working paper, Deconstructing the Stablecoin Sandwich: The Cost of Cross-Border Stablecoin Transfers, was prepared by André Reslow, Edona Reshidi, Andrew Usher, Jeanne Verrier and Marcello Miccoli. Analyzing 4,005 transfer routes across 270 payment corridors, 18 countries and 29 cryptocurrency exchanges, the research finds that stablecoins can significantly reduce international payment costs. However, their affordability depends more on exchange charges, banking infrastructure and local currency markets than on blockchain technology alone.

Stablecoins Promise Cheaper Transfers, but Hidden Costs Remain

International money transfers remain expensive, particularly for migrant workers, small businesses and families dependent on overseas remittances. According to World Bank figures cited in the research, sending $200 internationally cost an average of 6.36 percent in the third quarter of 2025, more than twice the G20 target of 3 percent.

Stablecoins, particularly US dollar-linked cryptocurrencies USDT and USDC, have emerged as alternatives because they allow funds to move internationally through blockchain networks. Cross-border stablecoin flows were estimated at approximately $6.3 trillion in 2025, although this remained a small share of the traditional international payments market.

The researchers explain that transferring stablecoins involves several steps. Their framework, called the "stablecoin sandwich," begins when a sender deposits domestic currency into a cryptocurrency exchange. The money is converted into stablecoins, transferred internationally, exchanged into the recipient's local currency and withdrawn into a bank account.

Each stage can involve charges, making the overall transaction more expensive than the blockchain transfer alone suggests.

Exchange Fees and Banking Charges Drive Payment Costs

The study estimates that sending $200 through stablecoins costs an average of 2.18 percent, with a median of 1.99 percent. However, costs vary significantly across payment corridors, ranging from negative 2.18 percent to 8.03 percent.

Cryptocurrency exchange trading fees represent the largest cost component, averaging 0.85 percentage points. Conventional currency deposit and withdrawal charges contribute another 0.67 percentage points, while cryptocurrency transfer fees account for 0.48 percentage points. Stablecoin premiums and trading spreads contribute an average of 0.18 percentage points.

These findings challenge the assumption that cheaper blockchain transactions automatically produce cheaper international payments. Most expenses arise when users convert traditional money into digital assets and back again.

The researchers also find that choosing different banking methods can substantially change costs. When customers use the cheapest available deposit and withdrawal options, average transfer costs remain at 2.18 percent. Selecting median-priced methods increases costs to 3.04 percent, while the most expensive methods push them to 4.07 percent.

This suggests that affordable banking services and competitive cryptocurrency exchanges are essential for delivering meaningful savings.

Why Sending Money Costs More in Some Countries

One of the study's most important findings concerns stablecoin premiums, which occur when digital currencies trade above or below benchmark foreign exchange rates.

In countries where demand for US dollars is strong or access to foreign currency is restricted, stablecoins may command higher local prices. This increases costs for people buying stablecoins to send money abroad but can benefit recipients selling them.

South Korea illustrates this through the phenomenon known as the "Kimchi premium." The researchers find that the 15 cheapest payment corridors recorded average costs of negative 1.05 percent, while the 15 most expensive averaged 6.88 percent.

Costs also differ between advanced and developing economies. Transfers between advanced economies average 2.31 percent, while transfers from advanced economies into emerging markets cost 1.61 percent. Transfers in the opposite direction average 3.05 percent, and payments between emerging markets cost 2.01 percent.

These differences highlight how domestic financial conditions, currency demand and access to banking services influence international payment costs.

What the Findings Mean for Consumers, Traders and Policymakers

The research shows that stablecoins can offer substantial savings compared with conventional remittance providers. Across 33 comparable payment corridors, traditional services charge an average of 5.81 percent, compared with 1.02 percent for stablecoin transfers.

However, stablecoins are not always the cheapest option. In about one-third of these corridors, the cheapest traditional provider costs less than the cheapest stablecoin route.

Transaction size also matters. Average stablecoin transfer costs decline from 4.12 percent for $50 to 1.54 percent for $5,000 because fixed charges consume a larger share of smaller payments. This matters especially for migrant workers sending modest amounts to their families.

For traders and small businesses, cheaper international transfers could reduce payment expenses and improve cross-border commercial transactions. Consumers could benefit from greater competition, while policymakers face the challenge of encouraging innovation without overlooking financial risks.

The researchers caution that their estimates exclude transaction speed, counterparty risks, onboarding requirements and other practical difficulties. Their findings also represent observed market conditions rather than guaranteed costs for every customer.

Stablecoins could improve international payments, but blockchain technology alone cannot solve the problem of expensive transfers. Affordable banking access, transparent exchange charges, competitive financial services and effective regulation will ultimately determine whether digital currencies deliver meaningful savings for businesses and households.