Latin America's Stablecoin Ecosystem Faces Concentration Risk

Latin America's stablecoin ecosystem may be vulnerable to disruption due to its reliance on a small group of liquidity providers, according to Amit Chu, partner at Verda Ventures. In a recent report by Varys Capital and Verda Ventures, researchers analyzed 494 companies in the region but found only 16 whose primary business is providing wholesale stablecoin-to-fiat liquidity.

Chu noted that many sellers of liquidity exist, but few are specialists, and that these providers often pass on currency risk to a small group of desks and exchanges. This concentration of risk could lead to problems if a key provider loses banking access, causing users to face higher costs or delays when converting their stablecoins into local currency.

The report found that countries with the greatest monetary instability exhibited the fastest growth in stablecoin adoption, with stablecoins accounting for 32.1% of cross-border crypto value and 22.1% of domestic P2P activity by June 2026.

Chu suggested that clearer rules on licensing could help reduce concentration by making it easier for banks to serve liquidity providers. He also pointed to local-currency stablecoins, which could allow more market makers to settle transactions on-chain.