Latin America's stablecoin payment ecosystem relies on a small group of liquidity providers, according to a report from crypto venture companies Varys Capital and Verda Ventures. The concentration of providers could disrupt customers' ability to convert stablecoins into local currency if a major provider loses banking access.
The report analyzed 494 companies in the region and identified only 16 whose primary business is providing wholesale stablecoin-to-fiat liquidity, corporate treasury, and credit services. Amit Chu, a partner at Verda Ventures, told Cointelegraph that many companies sell liquidity, but few specialize in it, and most likely depend on the same underlying desks and exchanges.
Growth Despite Concentration Risks
Stablecoins have become increasingly important in Latin America's crypto economy. According to a September Chainalysis report, stablecoins accounted for 32.1% of cross-border crypto value by June 2026, 22.1% of domestic peer-to-peer activity, and 17.6% of personal wallet balances in the region. Countries with greater monetary instability showed the fastest growth in stablecoin adoption.
A disruption affecting a key provider could leave users holding stablecoins and facing higher costs or delays when converting them to local currency. Chu said spreads would widen, cash-outs to local bank accounts would slow or pause, and funds in transit with a failed desk could become stuck.
Potential Solutions
The report acknowledged that licensing represents the primary tool for reducing concentration. Clearer regulatory rules could enable banks to serve liquidity providers more easily. Local-currency stablecoins could allow more market makers to settle transactions on-chain, while global trading firms have begun quoting Latin American currency pairs.
Chu noted that mature foreign exchange markets also have fewer dealers than customer-facing firms. He emphasized that redundancy and capital matter most, with each major currency ideally supported by several independent, well-capitalized desks with separate banking relationships.
The report identified Latin America as a growth opportunity, particularly for businesses addressing cross-border payments, as fragmented banking systems and costly transfers create demand for more efficient money transfer services.
