LATAM Stablecoin Ecosystem Vulnerable to Disruptions, Report Warns

Amit Chu, partner at Verda Ventures, warns that Latin America's stablecoin payment ecosystem relies on a small group of underlying liquidity providers. This fragility could disrupt users' ability to cash out into local currency if a key provider loses banking access.

The report, published by Varys Capital and Verda Ventures, analyzed 494 companies in the region and found only 16 whose primary business is providing wholesale stablecoin-to-fiat liquidity. Chu notes that while there are many sellers of liquidity, few are specialists who warehouse the currency risk themselves.

Stablecoins currently play a significant role in Latin America's crypto economy, accounting for 32.1% of cross-border crypto value and 22.1% of domestic P2P activity by June 2026, according to a Chainalysis report. Countries with the greatest monetary instability exhibited the fastest growth in stablecoin adoption.

Chu believes that clearer rules and licensing could reduce concentration in the system, while local-currency stablecoins and global trading firms quoting Latin American currency pairs could also help increase redundancy and capital.