Latin America's Stablecoin Market Evolution: From Survival to Growth
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Latin America's Stablecoin Market Evolution: From Survival to Growth
The next alpha opportunity in Latin America's crypto market lies in how Web3 infrastructure can leverage this $1.5 trillion transaction volume to replicate and surpass the growth miracle of traditional fintech.
Navigating Web3 tides with focused insightsAuthor: @BlazingKevin_, the Researcher at Movemaker
Latin America is undergoing a financial infrastructure revolution driven by currency failure. Based on macroeconomic data, on-chain behavior analysis, and regulatory policy texts from 2024 to 2025, this report provides a panoramic analysis of the region's stablecoin market. The study finds that the Latin American market has moved beyond the early stage of passive dollarization and is now deeply transforming into Web3 financial infrastructure.
At the macro level, Argentina’s 178% inflation rate and Brazil’s $300 billion in crypto transaction volume form the dual foundation for stablecoins as both survival tools and efficiency tools. At the micro level, a new species—Crypto Neobank—is emerging. Compared to traditional fintech giants like Nubank, Crypto Neobanks leverage zero-fee networks such as Plasma supported by Tether and DeFi yields to fill the vast gap between traditional banking and pure crypto speculation. This report argues that the next alpha opportunity in Latin America’s crypto market lies in how Web3 infrastructure can leverage this $1.5 trillion transaction volume to replicate and surpass the growth miracle of traditional fintech.
1. Reconstructing the Macro Narrative
To understand the uniqueness of the Latin American market, one must abandon the "technological innovation" perspective common in North America or Europe. In Latin America, the explosive adoption of stablecoins is an inevitable outcome of structural macroeconomic imbalances. The core drivers here are survival and efficiency, and the integration of Web3 technology is turning this passive survival need into active financial upgrading.
1.1 Currency Failure and the Loss of Store-of-Value Function
Inflation is the strongest catalyst for dollarization through crypto in Latin America. Argentina and Venezuela are typical examples of this phenomenon.
Despite the radical economic reforms implemented by the Milei administration, Argentina’s annual inflation rate remained as high as 178% between 2024 and 2025, with the peso depreciating 51.6% against the U.S. dollar within 12 months. Under these conditions, stablecoins are no longer investment vehicles but de facto units of account. On-chain data shows that stablecoin transactions account for 61.8% of total trading volume in Argentina, far exceeding the global average. Demand for stablecoins exhibits extremely high price elasticity: whenever exchange rates break key psychological thresholds, monthly stablecoin purchases on exchanges surge past $10 million.
In Venezuela, as the bolívar continues to lose value, Tether has penetrated everyday economic activities such as supermarket purchases and real estate transactions. Data indicates a strong negative correlation between the fiat exchange rate and cryptocurrency inflows, showing that stablecoins provide a parallel financial system immune to government monetary policy interference.
1.2 Financial Exclusion and the Vacuum of 122 Million People
Besides fighting inflation, financial exclusion is another major pain point. An estimated 122 million adults in Latin America (26% of the population) lack bank accounts. This large population is excluded from traditional banking due to minimum balance requirements, cumbersome compliance documentation, and geographic isolation.
This is precisely the fertile ground for the rise of new banks. Nubank’s success proves this logic: through a branchless, low-cost mobile banking model, Nubank captured 122 million users in just ten years, reaching a market cap of $70 billion and covering 60% of Brazil’s adult population.
However, Crypto Neobanks are taking this logic a step further. While Nubank solved accessibility issues, its accounts remain primarily denominated in local fiat currencies, and savings yields often fail to outpace inflation. In contrast, Web3 neobanks can offer accounts based on USD stablecoins without needing a banking license, and by integrating DeFi protocols, they deliver 8% to 10% annualized returns in USD terms—an irresistible proposition for users living in high-inflation economies.
1.3 Remittance Economy: A Revolution in Cost Reduction and Efficiency
Latin America is one of the world’s largest recipients of remittances, receiving over $160 billion annually. Traditional cross-border remittances typically charge 5% to 6% in fees and take several days to settle, resulting in nearly $10 billion lost each year in transaction costs.
On the U.S.-Mexico corridor—the world’s largest single remittance channel—Bitso has already processed over $6.5 billion in transfers, capturing 10% of the market. Blockchain-based cross-border transfers reduce costs to as low as $1 or even a few cents, while settlement time drops from 3–5 days to mere seconds. This hundredfold increase in efficiency constitutes a disruptive blow to traditional financial systems.
2. Market Depth and On-Chain Behavior
Data from 2024 to 2025 shows that Latin America has developed a distinct adoption pattern: high frequency, large transaction sizes, and a high degree of institutionalization.
2.1 Transaction Volume and Growth Resilience
According to aggregated data, Latin America recorded nearly $1.5 trillion in cryptocurrency transaction volume between July 2022 and June 2025, representing a 42.5% year-on-year growth. Notably, even during periods of global market volatility, Latin America’s growth baseline remains solid. In December 2024, the region’s monthly transaction volume surged to a record $87.7 billion. This demonstrates that Latin America’s growth is not merely beta exposure riding global bull cycles, but rooted in endogenous, fundamental demand.
2.2 Brazil’s Institutional Dominance vs. Argentina’s Retail Frenzy
Market structures across countries show significant divergence:
Brazil is the undisputed leader in the region, receiving approximately $318.8 billion in crypto assets—nearly one-third of the regional total. Central bank data reveals a staggering fact: about 90% of all cryptocurrency fund flows in Brazil occur via stablecoins. This exceptionally high ratio underscores the institutional nature of Brazil’s market—stablecoins are primarily used for intercompany payments, cross-border settlements, and liquidity routing, rather than retail speculation.
Argentina ranks second with transaction volumes between $91.1 billion and $93.9 billion. Unlike Brazil, Argentina’s growth stems largely from retail adoption, reflecting how ordinary citizens have embraced crypto dollarization as a daily life strategy to combat inflation.
2.3 Platform Preference: Dominance of Centralized Exchanges
Latin American users heavily rely on centralized exchanges. Data shows that approximately 68.7% of trading activity occurs on centralized platforms—the second-highest proportion globally.
This trend holds strategic significance for Web3 projects entering Latin America. “Riding on existing ships” is the optimal strategy. Since local exchanges like Mercado Bitcoin and Bitso possess compliant fiat gateways and deep user trust, Crypto Neobanks should not attempt to directly compete in fiat on/off-ramps but instead partner to penetrate their massive user bases.
3. Asset Evolution
The Latin American market features a coexistence of globally dominant stablecoins and locally innovative assets, and is transitioning from holding assets for preservation to holding them for yield generation.
3.1 The Duopoly of Tether and USDC
Leveraging first-mover advantage and deep liquidity, Tether remains the hard currency in Latin America’s peer-to-peer and informal economies. In over-the-counter markets in Venezuela and Argentina, Tether is the definitive pricing unit. Brazilian tax data also shows Tether accounts for roughly two-thirds of declared transaction volumes. Its censorship resistance and widespread adoption make it the preferred tool for circumventing capital controls.
USDC is expanding rapidly through compliant channels. Circle’s partnerships with giants like Mercado Pago and Bitso have made USDC the preferred asset for institutional settlements. Bitso reports that by the end of 2024, USDC had become the most purchased asset on its platform, accounting for 24%—surpassing Bitcoin.
3.2 The Bridging Role of Local Fiat-Backed Stablecoins
From 2024 to 2025, stablecoins pegged to local Latin American fiat currencies began to emerge, aiming to resolve friction between local payment systems and blockchains.
Mercado Libre’s launch of Meli Dólar in Brazil was a landmark event. Integrated via Mercado Pago into the daily shopping routines of tens of millions of users, it serves as a vehicle for credit card cashback, significantly lowering user entry barriers. Additionally, Num Finance’s stablecoins pegged to the peso and real primarily serve cross-exchange arbitrage and enterprise-grade DeFi operations, enabling local businesses to manage on-chain liquidity without foreign exchange risk.
3.3 Emerging Trend: Yield-Bearing Assets and DeFi Integration
This represents the next alpha opportunity in Latin America. Traditional banks in the region typically offer very low interest rates on USD accounts. Web3 neobanks, by integrating DeFi protocols, are redefining savings.
Take EtherFi as an example—a DeFi protocol with billions in total value locked that has launched a credit card product. Users earn yield on staked crypto assets while using the card for spending. This model allows users to spend via borrowing without selling their assets, preserving upside exposure while solving liquidity needs.
In high-inflation countries, synthetic dollar stablecoins like USDe offering 10% to 15% native yields are highly attractive. A 10% annualized return in USD terms is a disruptive upgrade compared to Nubank’s R$-denominated deposits.
4. National Development Divergence
The political and economic environments across Latin American countries vary widely, leading to vastly different stablecoin development paths.
4.1 Brazil: The Dual Track of Compliance and Innovation
Brazil is the most mature and regulated market in Latin America. The central bank’s digital currency project, Drex, underwent strategic adjustments in 2025, shifting focus to the wholesale segment, thereby leaving significant retail space open for private stablecoins.
In the same year, Brazil implemented a unified crypto tax regime and clarified the foreign exchange regulatory status of stablecoins. While increasing operational costs, this also granted legitimacy to the industry. Local innovation project Neobankless exemplifies this trend. Built on Solana, it fully abstracts blockchain complexity at the front end and integrates directly with Brazil’s national payment system, PIX. Users deposit reais, which are automatically converted into USDC for yield generation in the backend. This “Web2 experience, Web3 backend” model directly challenges traditional fintech user habits.
4.2 Argentina: A Laboratory of Liberalization
The virtual asset service provider registration system established by the Milei government raised compliance barriers but effectively acknowledged the competitive monetary role of USD stablecoins. The asset regularization program brought a large volume of gray-market stablecoins into the formal economy.
Lemon Cash addressed the “last-mile” payment challenge by issuing crypto debit cards. Users hold USDC to earn yield and only convert to pesos at the moment of swiping. This model is highly sticky in high-inflation environments, as it minimizes exposure to fiat currency.
4.3 Mexico and Venezuela: Polar Opposites
In Mexico, the Fintech Law and central bank restrictions have created a separation between banks and crypto firms. As a result, companies like Bitso have aggressively expanded B2B services, using stablecoins as intermediaries to optimize U.S.-Mexico cross-border capital flows and bypass inefficient traditional banking systems.
In Venezuela, amid renewed sanctions, Tether has even become a settlement instrument for oil exports. Among the general population, Binance’s peer-to-peer trading remains a lifeline for accessing foreign currency, with the market overwhelmingly choosing private USD stablecoins over the failed state-backed petro.
5. From Traditional Finance to Crypto Neobank
The Latin American market is at a critical juncture, evolving from traditional fintech toward Crypto Neobanks. This is not merely a technological upgrade, but a generational leap in business models.
5.1 Valuation Gap and Alpha Opportunity
Currently, Nubank has a market cap of around $70 billion, and Revolut is valued at $75 billion—proving the commercial viability of digital banks in Latin America. In contrast, the entire Web3 neobank sector has a combined valuation under $5 billion—just 7% of Nubank’s market cap.
This represents a massive value gap. If Crypto Neobanks capture even 10% of Nubank’s market share and leverage superior unit economics, they could see valuations grow 10 to 30 times.
5.2 Next-Gen Infrastructure: The Zero-Fee Revolution
One of the biggest barriers to crypto payment adoption is gas fees. Plasma and its flagship product, Plasma One, offer a breakthrough. As a blockchain officially backed by Tether, Plasma enables zero-fee Tether transfers. This eliminates the primary psychological and economic barrier for users adopting crypto payments.
The fact that Plasma achieved over $5 billion in total value locked within 20 days proves that when infrastructure delivers bank-grade services directly, capital inflows can be astonishingly fast. This vertical integration of “infrastructure + neobank” may become the dominant future model.
5.3 Business Model Disruption
Crypto Neobanks enjoy three key moats over traditional banks:
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Settlement Speed: Reduced from 3–5 days via SWIFT to seconds on blockchain.
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Account Currency: Upgraded from depreciating local fiat to inflation-resistant USD stablecoins.
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Yield Source: Shifted from earning net interest margins to sharing native DeFi protocol yields with users.
For Latin American users, this isn’t just a better experience—it’s a necessity for asset preservation.
6. Challenges, Strategies, and Final Outlook
6.1 Challenges and Breakthrough Strategies
Despite the bright outlook, incidents of banks closing crypto company accounts due to compliance fears still occur in Mexico and Colombia. Moreover, regulatory fragmentation across Latin America makes cross-border compliance extremely costly.
For Web3 projects targeting Latin America, a specific winning playbook is essential:
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Focus on Brazil First: Given Brazil’s 31% share of Latin America’s crypto transaction volume and its robust payment infrastructure, it must be the primary battleground.
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Target Niches First: Avoid trying to be everyone’s bank from day one. Success comes from capturing a niche community before expanding.
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Viral Marketing: 90% of Nubank’s growth came from word-of-mouth. Crypto Neobanks should use on-chain incentives to drive low-cost viral growth on social networks like WhatsApp.
6.2 Market Predictions
Based on the above analysis, we make the following mid-term predictions for stablecoin development:
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Private Stablecoins Replace CBDCs: Given Brazil’s Drex retreat from retail, privately issued compliant stablecoins will effectively assume the role of digital fiat.
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Mainstreaming of Yield-Bearing Assets: Non-yielding stablecoins may face competition from income-generating assets like tokenized U.S. Treasuries. Latin American users will increasingly prefer assets that both hedge inflation and generate returns.
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Market Segmentation: The market will split into two tiers—one being a highly compliant, bank-integrated white-listed market, and the other a gradually shrinking but persistent gray peer-to-peer market.
Conclusion
Latin America’s stablecoin market is the frontline laboratory of global fintech innovation. Here, stablecoins are not a luxury add-on, but a vital necessity. From a digital lifeline in the hands of Argentinians to a cross-border settlement tool for Brazilian financial institutions, stablecoins are reshaping the continent’s financial circulatory system.
With regulatory frameworks set to take shape in 2025 and the emergence of the Crypto Neobank species, Latin America is poised to become the first region globally to achieve large-scale commercial adoption of stablecoins. For investors, the current window of opportunity lasts only 12 to 18 months. Those who can replicate Nubank’s user experience on Web3 rails before 2026 will become the next billion-dollar giants. The race has begun—and Latin America is the untapped goldmine.
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