LATAM's Stablecoin Plumbing Has One Too Few Plungers, Investor Warns 🚽

Latin America's stablecoin payment ecosystem depends on a narrow band of wholesale liquidity providers, a setup that could leave end users unable to cash out into local currency if a single key desk loses banking access, according to Amit Chu, a partner at Verda Ventures. In a newly published joint report from crypto venture firms Varys Capital and Verda Ventures, researchers using Verda's Stablescape database cataloged 494 companies across the region but identified only 16 whose primary business is providing wholesale stablecoin-to-fiat liquidity, corporate treasury and credit. "Fragility in the system is concentrated in its thinnest layer," the report concluded. "There are many sellers of liquidity and very few specialists. What we can't see from public data is how many of them warehouse the currency risk themselves and how many pass it to the same few desks and exchanges. Our view is that it's the second, and that's the fragility the report is pointing at," Chu told Cointelegraph.

Stablecoins already anchor a significant share of Latin America's on-chain activity. According to a September Chainalysis report, stablecoins by June 2026 accounted for 32.1% of cross-border crypto value in the region, along with 22.1% of domestic P2P activity and 17.6% of personal wallet balances, with the fastest adoption recorded in countries experiencing the greatest monetary instability. Chu said a disruption affecting a major provider would hit users at the conversion step. "The problem would be at the exits. Spreads would widen, cash-outs to local bank accounts would slow or pause, and funds in transit with the failed desk could be stuck," he said. Separately, related industry research has estimated that stablecoin firms face a $112 billion additional opportunity in LATAM remittances.

The report does not quantify how concentrated the liquidity itself is, and Chu acknowledged that Stablescape does not track transaction volumes or assign market share. Exchanges and payment companies classified elsewhere in the database also provide liquidity, though Verda believes some ultimately route through the same underlying desks. As remedies, Chu pointed to clearer licensing, which could make it easier for banks to serve liquidity providers, and to local-currency stablecoins that would let more market makers settle transactions onchain, while global trading firms are beginning to quote Latin American currency pairs. He cautioned against treating the small specialist count as automatically alarming. "Mature FX markets also have far fewer dealers than customer-facing firms. What matters is redundancy and capital," he said. "Each major currency should have several independent, well-capitalized desks with separate banking relationships, and each wallet should be able to route between multiple players."