LATAM Stablecoin Liquidity May Rely on Few Providers

Latin America’s stablecoin payment ecosystem may depend on a small group of underlying liquidity providers, potentially disrupting customers’ ability to cash out into local currency if a key provider loses banking access, according to Verda Ventures partner Amit Chu.

In a newly published report from crypto venture companies Varys Capital and Verda Ventures, drawing on Verda’s Stablescape database, researchers analyzed 494 companies in the region, but found only 16 whose primary business is providing wholesale stablecoin-to-fiat liquidity, corporate treasury and credit, warning that “fragility in the system is concentrated in its thinnest layer.”

“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 are playing a growing role in Latin America’s crypto economy. According to a September Chainalysis report, stablecoins by June 2026 accounted for 32.1% of cross-border crypto value, and 22.1% of domestic P2P activity and 17.6% of personal wallet balances in the region.

Chu said a disruption affecting a key provider could leave users holding stablecoins as they face higher costs or delays when converting them into a local currency. 

“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. 

Related: Stablecoin firms have a $112B additional opportunity in LATAM remittance 

However, the report doesn’t establish the degree to which liquidity itself is concentrated. Chu said Stablescape does not track transaction volumes and doesn’t provide market share figures. Exchanges and payment companies classified elsewhere in the database also supply liquidity, though Chu said Verda believes some ultimately depend on the same underlying desks. 

Chu said licensing is the biggest lever for reducing concentration, as clearer rules would make it easier for banks to serve liquidity providers. He also pointed to local-currency stablecoins, which could allow more market makers to settle transactions onchain, while global trading firms are beginning to quote Latin American currency pairs.

Chu also cautioned against assuming that a small number of specialists necessarily signals a problem. 

“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.”

The report generally identified Latin America as a growth opportunity, particularly for businesses addressing cross-border payments. It argued that fragmented banking systems and costly transfers create demand for services that make it easier for people and businesses to move money between countries.

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