- A new report from Varys Capital and Verda Ventures found only 16 companies in Latin America specialize in wholesale stablecoin-to-fiat liquidity, raising fragility concerns.
- Partner Amit Chu warns that disruption to a key liquidity provider could slow or halt cash-outs into local currencies, widening spreads and locking funds in transit.
- Licensing and local-currency stablecoins are proposed as solutions to reduce concentration and improve redundancy in the region’s payment ecosystem.
Stablecoin adoption across Latin America faces a hidden fragility, warns a newly published report from crypto venture firms Varys Capital and Verda Ventures. Researchers analyzed 494 companies in the region but identified only 16 whose primary business is providing wholesale stablecoin-to-fiat liquidity, corporate treasury, and credit.
According to Verda Ventures partner Amit Chu, the system’s weakness sits at its thinnest layer. “There are many sellers of liquidity and very few specialists,” Chu told Cointelegraph, explaining that public data cannot show how many firms warehouse currency risk themselves versus passing it to the same few desks and exchanges.
September data from Chainalysis underscores stablecoins’ growing role: by June 2026, they accounted for 32.1% of cross-border crypto value in the region, along with 22.1% of domestic peer-to-peer activity. Countries with the greatest monetary instability showed the fastest adoption growth, according to the report.
Chu warned that a disruption hitting a key provider would hurt users at the point of cash-out. “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. The report does not establish exact liquidity concentration levels, as Stablescape does not track transaction volumes.
To reduce risk, Chu pointed to licensing as the biggest lever: clearer rules would make banks more willing to serve liquidity providers. He also highlighted local-currency stablecoins, which could let more market makers settle transactions onchain, and noted that global trading firms are starting to quote Latin American currency pairs.
Nevertheless, Chu cautioned that a small number of specialists does not automatically signal trouble. “Mature FX markets also have far fewer dealers than customer-facing firms,” he said. “What matters is redundancy and capital.” The report generally identifies Latin America as a growth opportunity, especially for cross-border payment services that address fragmented banking and costly transfers.
✅ Follow BITNEWSBOT on Telegram, Facebook, LinkedIn, X.com, and Google News for instant updates.
