Fintech money transfer operators can significantly reduce the cost of international payments compared with traditional bank transfers, while stablecoins face continuing challenges around liquidity, conversion fees and access to fiat currencies, according to new research from the Bank for International Settlements (BIS).
Published on 19 October 2026 as Working Paper 1385, Competing rails for cross-border payments: banks, fintechs, and stablecoins examines the costs of three payment channels: traditional banks using correspondent banking networks, fintech money transfer operators and stablecoin-based transfers.
The research compares the total cost of payments across different currencies and transfer amounts, separating foreign exchange (FX) markups from explicit charges such as wire fees, exchange trading costs, blockchain transaction fees and fiat withdrawal costs.
The findings highlight the cost advantage offered by fintech money transfer operators. In a small sample of traditional bank transactions, FX markups ranged from approximately 2% to 4.7%, before additional wire fees were included.
By comparison, fintech transfer costs were considerably lower and declined as a proportion of the amount sent as transfer values increased. For transfers of $10,000 from the United States, median costs across developed-market currency groups were approximately $40–$60, although some destinations remained more expensive.
The study also examines whether stablecoins can reduce the frictions associated with international payments. It finds that moving funds through stablecoins still requires conversions between fiat currencies and digital assets, often involving crypto exchanges and other intermediaries.
Trading, conversion and withdrawal charges can increase the overall cost. Recipients may also face delays while stablecoins are converted and banks process funds before they become available in their accounts. The researchers note that liquidity between US dollar stablecoins and stablecoins denominated in other currencies is generally limited.
Stablecoins can offer favourable FX pricing for transfers from developed markets to some emerging-market economies. However, the paper attributes this advantage to distortions associated with capital controls rather than blockchain technology itself. Limited market depth and volatile pricing also restrict the scale of these transfers.
The authors conclude that stablecoins are not a universal solution to the challenges facing cross-border payments. Their competitiveness depends on factors beyond the underlying technology, including market liquidity, reliable access to fiat currencies, regulatory compliance and trust in intermediaries.
The paper is available from the Bank for International Settlements.
