What makes up the cost of converting between fiat and stablecoins?

Cross-border FX transactions can be monumentally complex to break apart, we wrote a whole report on this. One of the hardest things to understand are the fees. While stablecoin rails can substantially reduce total transaction costs, they don't entirely eliminate them. A question that often comes up when clients talk to us is, "how much does it actually cost to source stablecoins?"

For institutional payment providers using USDC and USDT, the total cost of the conversion depends on their current inventory and how they choose to make up the difference.

How Fiat to Stablecoin Conversion Costs Work

Existing inventory

In many cases, a payment provider might hold tokens on their books, which obviously don't require additional conversion. Even so, depending on the provider, they might still pass on the cost of maintaining and balancing their inventory. It's rare that providers will charge a separate "fee" here, often it is baked into the FX spread offered.

Sourcing additional liquidity

When a provider needs more tokens to support a transaction they can either source them from an OTC desk or directly from the issuer, provided they have the necessary access. Minting and redemption is what helps keep stablecoins stable. The cost of obtaining stablecoins from an OTC desk can fluctuate around the peg depending on local liquidity, transaction size and any risk premium that might be baked in.

USDC issuance and redemption

For those with direct access to Circle Mint, conversions are 1:1 (USD to stablecoin). They do not charge an additional fee, though the relevant banks may. Circle makes most (much greater than 90%) of its money from interest on its cash reserves rather than minting fees, which incentivizes them to make minting as frictionless as possible. Token redemptions through Circle's new Standard option also has no fee, and processing usually takes two business days. Express redemption costs 5 bps and can be mitigated by certain credits.

USDT issuance and redemption

Conversely, Tether charges a 0.1% fee for direct token purchases and the greater of $1,000 or 0.1% for direct token redemptions. Tether claims these fees are to offset various regulatory costs, and create an entry barrier to ensure that only "serious" institutional players participate in its direct issuer program.

The price you pay

When you use a stablecoin rail, the cost of the conversion may include the cost of sourcing coins or not. It might also include other requisite network or transfer charges. As I said earlier, these are rarely broken out as line items, providers build these into the total cost of conversion or eat them to make their services look more attractive.

The same organizing principle applies to non-USD backed stablecoins, though the precise mechanics depends on the issuer.

Stablecoin Issuer Minting and Redemption Fees

Published fees as of October 23, 2026. Banking charges, network costs, secondary-market spreads excluded. Direct issuer access may require institutional onboarding and minimum transaction sizes.