LATAM Stablecoin Liquidity Potentially Concentrated Among Few Providers, Investor Says

Liquidity Providers Concentration

The study, based on Verda’s Stablescape database, analyzed 494 companies in Latin America and found only 16 primarily engaged in wholesale stablecoin-to-fiat liquidity, corporate treasury, and credit services. The report warns that the system’s fragility is concentrated in this thinnest layer of liquidity providers.

Amit Chu, partner at Verda Ventures, highlighted that while many sell liquidity, very few specialize in it. He believes the majority transfer currency risk through the same few trading desks and exchanges, creating systemic vulnerability as identified in the report.

Growing Role of Stablecoins in Latin America

Chainalysis’ September report noted that by June 2026, stablecoins accounted for 32.1% of cross-border crypto transaction value in the region, 22.1% of domestic peer-to-peer transactions, and 17.6% of personal wallet balances.

This underscores the deep integration of stablecoins into Latin America’s crypto economy.

Potential Impact of Key Provider Disruption

Chu explained that if a key liquidity provider were to lose banking access, users could face higher costs and delays when converting stablecoins to local fiat currencies. The problem would manifest at the ‘exits’, where wider spreads would occur, cash-outs to local bank accounts might be slowed or halted, and funds in transit with the affected desk could get stuck.

Study Limitations and Regulatory Outlook

The report does not quantify the degree of liquidity concentration, as Stablescape does not track transaction volumes or market shares. While other exchanges and payment firms also supply liquidity, some might ultimately rely on the same underlying desks, according to Chu.

He identified licensing clarity as the primary lever to reduce concentration, as clearer regulations would facilitate bank services to liquidity providers, promoting competition and market diversification.

Chu also mentioned local-currency stablecoins that enable market makers to settle transactions onchain and noted the increasing involvement of global trading firms quoting Latin American currency pairs.

Importance of Diversification and Capitalization

Chu cautioned against assuming there is a problem based solely on a small number of liquidity specialists, pointing out that mature foreign exchange markets also have fewer dealers than customer-facing firms.

What matters is redundancy and capital sufficiency. Each major currency should have several independent, well-capitalized desks with separate banking relationships.

Furthermore, each wallet should be able to route trades among multiple liquidity providers to ensure flexibility and resilience.

Latin America as a Growth Opportunity

The report generally positions Latin America as a growth market, particularly for businesses focused on cross-border payments.

It emphasized that fragmented banking systems and high transfer costs create demand for services easing transnational money movement — a niche where stablecoins can play a key role.