BIS study compares cross-border payment costs: fintech transfers are cheaper than banks, while stablecoins remain constrained by conversion costs

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A BIS working paper compares correspondent banking remittances, fintech remittance services and stablecoin transfers. It finds that foreign exchange markups on bank remittances in the sample were about 2.3% to 4.7%, while the median cost of fintech services was typically about 0.4% to 0.6% for remittances from the United States to developed markets in amounts exceeding $10,000. Stablecoin transfers also involve conversion between fiat currencies and stablecoins, transaction fees, and on- and off-ramp costs, while liquidity in related markets is far smaller than in traditional foreign exchange markets. The study notes that the costs, corridors and transaction amounts of different payment methods are not always directly comparable.