Author: Zen, PANews

Ruben López, a stockbroker from Buenos Aires, spends a few minutes each morning completing a special "routine operation": he exchanges his Argentine pesos for US dollars at the official exchange rate, then exchanges the dollars for USDC, a stablecoin pegged 1:1 to the US dollar, on a trading platform, and finally exchanges the stablecoin back for pesos through the parallel market exchange rate.

Just as Argentina's midterm elections were approaching, President Javier Milley tightened foreign exchange controls to support the peso's exchange rate. However, Ruben was able to earn a steady arbitrage profit of about 4% by spending no more than 10 minutes a day.

Mexican immigrants living in the United States can open WhatsApp, send a few messages with the stablecoin USDC, and their families in Guanajuato can receive the funds, settled in Mexican pesos, on their phones within two minutes.

In recent years, Latin America, a region long regarded as highly volatile, risky, and uncertain, is now increasingly being seen by US payment giants, venture capital funds, and stablecoin startups as a key battleground for the next round of financial infrastructure restructuring.

In February 2026, Visa announced its acquisition of Argentine payment platforms Prisma and Newpay from Advent International to strengthen its digital payments and infrastructure capabilities in Argentina. In March, ARQ, a Latin American financial application focused on stablecoins, announced the completion of a $70 million funding round, with participation from Sequoia Capital and Founders Fund, among others. ARQ has built the infrastructure connecting traditional banking networks and stablecoin-based payment systems, enabling users to hold and transact foreign currency.

Looking at these cases together, it's clear that American capital is not just focused on a single high-growth company, but rather on securing key positions in the restructuring of the Latin American financial system: whoever controls payment gateways, clearing networks, account relationships, and dollar-based store of value instruments will have a greater chance of gaining the upper hand in the next stage of competition.

Financial frictions highlight pain points, laying the foundation for Latin America's high growth potential.

The reason Latin America has become a key market for fintech and stablecoin companies is fundamentally because the financial frictions there are not abstract issues, but a collection of real-world problems repeatedly confirmed by macroeconomic indicators, payment scenarios, and on-chain activities. The financial needs here are not singular, but exhibit a clear stratified structure.

In economies with relatively controlled inflation, such as Brazil and Mexico, users' most direct pain points are often not currency devaluation, but rather high payment costs, slow cross-border transfers, and inefficient account services. A World Bank report shows that in the first quarter of 2025, the average cost of sending $200 globally was still as high as 6.49%, with digital channels averaging around 5%. In typical US-Mexico remittance scenarios, traditional channels charge as much as 5%-7%. For these markets, the value of fintech lies primarily in making payments, clearing, and cross-border remittances cheaper, faster, and smoother.

On the other hand, in high-inflation economies like Argentina, the issue isn't just payment efficiency, but how to preserve the value of money itself. For users in high-inflation markets, fintech and stablecoins primarily address value storage rather than user experience optimization. This means finding a more convenient way to hold relatively stable assets and facilitating lower-friction cross-border USD settlements.

Besides inflationary divergence and the cost of cross-border remittances, another notable feature of the Latin American financial market is that while users have been extensively educated to embrace digital payment systems in recent years, this imperfect system has not yet fully resolved issues related to cross-border transactions, value preservation, and "dollarization."

According to the World Bank's Global Findex and related publicly available materials, digital payment penetration rates in many Latin American countries are already quite high. For example, in Brazil, World Bank documents show that 70% of adults made digital payments in 2024; Argentina's corresponding figure under the previous Findex was also approximately 72%. This indicates that many core markets in Latin America no longer need to educate users from scratch, but have entered a stage where competition revolves around efficiency, cost, and the depth of application scenarios.

Take Pix in Brazil as an example. It has evolved from a money transfer tool into a de facto social payment infrastructure. According to publicly available data compiled by the European Payments Council, as of March 2024, Pix had approximately 153 million individual users and 15 million corporate users; in 2023, it processed approximately 42 billion transactions, with a transaction value of approximately 17.2 trillion reais.

However, while local digital payment networks can function, they cannot meet all financial needs of users. For users in this market, local transfers can become increasingly seamless, but when it comes to cross-border settlements, dollar storage, hedging against local currency depreciation, or low-cost global payments, frictions within the existing system remain evident.

It is here that stablecoins began to transform from crypto assets into a real-world financial instrument. A compelling example is the US-Mexico remittance corridor. Research from Mizuho Bank shows that, through exchanges like Bitso and platforms such as Félix Pago, the cost of remittances using stablecoins like USDT and USDC has fallen below 1%. Currently, Bitso processes $6.5 billion in US-Mexico stablecoin flows, representing 10% of the $63 billion annual remittance market between the US and Mexico.

These on-chain data demonstrate that Latin American users are not merely experimenting with stablecoins sporadically, but are treating them as a genuine and usable dollarization tool, serving both cross-border dollar flows and value storage functions. The International Monetary Fund (IMF) estimates that, based on GDP as a percentage of GDP, Latin America and the Caribbean are among the regions with the most significant stablecoin usage globally, at approximately 7.7%.

Furthermore, Chainalysis' 2025 Latin America report shows that from July 2022 to June 2025, the cumulative cryptocurrency transaction volume in Latin America approached $1.5 trillion. Brazil was the largest market in the region, receiving approximately $318.8 billion in cryptocurrency assets, followed by Argentina with approximately $93.9 billion and Mexico with approximately $71.2 billion. Regarding the share of stablecoins, Chainalysis' 2024 report showed that Argentina accounted for 61.8% of stablecoin trading volume, and Brazil for 59.8%, both significantly higher than the global average of 44.7%.

Certainty and growth potential in financial markets

In Latin America, demand has already occurred, transactions have been completed, and data is verifiable; however, the digitalization of payments, accounts, and fund management is still in its early stages, and there is significant room for improvement in market penetration. Therefore, the fundamental market structure dictates that Latin America offers not only a growth story but also a unique blend of certainty and growth potential.

In terms of certainty, the aforementioned market data is sufficient to demonstrate that demand truly exists, while growth potential stems from the medium- to long-term trend of payment and account digitization.

McKinsey's Latin American payments research indicates that in its sample of Spanish-speaking countries, debit cards have replaced cash as the most preferred payment method within just two years, and mobile payments are also rapidly gaining popularity. Even though cash still holds a significant share in many markets, consumers' payment preferences have clearly shifted towards non-cash instruments.

From a broader perspective, the digitalization of payments is not merely about enhancing convenience for consumers; it is also driving the restructuring of financial processes for businesses. A report by the Inter-American Development Bank shows that the share of digital payments in offline consumption scenarios in Latin America has increased from approximately 11% in 2020 to 30% in 2024. Meanwhile, over 70% of businesses in Latin America and the Caribbean have already engaged in digital procurement.

This indicates that digitalization is not only permeating personal transfers and payments, but also extending to corporate payment collection, reconciliation, fund aggregation, and procurement management. For fintech companies, this will create a larger market to serve. For example, Payoneer recently strengthened its local payment collection capabilities in Mexico, helping global sellers receive payments directly from local e-commerce platforms in Mexican pesos, reducing exchange costs; while Jeeves launched a stablecoin-supported business card for Latin American companies, aiming to reduce cross-border settlement time from days to minutes.

The emergence of stablecoins further reinforces this combination of certainty and growth potential. For Latin America, the importance of stablecoins lies not primarily in their investment attributes, but in their role as a technological tool to address the demand for US dollars and cross-border settlement issues.

The persistently high volume of remittances and the rigid cost of cross-border payments make the combination of stablecoins and local payment tracks more like filling a structural gap in the existing financial system than providing a short-term speculative tool.

Stablecoin payment services have already been initially launched in Argentina. For example, Takenos, an Argentine fintech company led by Variant Fund and Lattice Capital, announced that as of March this year, its stablecoin solution based on the Solana blockchain had processed more than $500 million in cross-border payments, serving 500,000 users in 20 Latin American countries, mainly for payroll payments and corporate transactions.

Why Latin America has become a new betting destination for American capital

Compared to the highly mature US market, dominated by industry giants and with well-established user education, many fintech and crypto-finance sub-sectors in Latin America are still in a stage where infrastructure is in place but the market structure is yet to be fully developed. For VCs, this usually means a better entry point.

In recent years, financing in Latin America has continued to grow, with capital flowing more towards mature companies that have adapted to market changes and have more robust business models. Local funds still tend to favor earlier-stage investments, while foreign capital, represented by US capital, prefers to enter when companies are more mature and scalable, acting as an amplifier after the business model has been initially validated and its scalability has become apparent.

Compared to Latin America, the US completed user education earlier, its infrastructure is already mature, and the division of labor among leading platforms and existing financial institutions is more solidified. Newcomers are either limited to extremely narrow niches, face extremely high customer acquisition costs, or can only compete with established giants for market share. In contrast, the boundaries of financial services in Latin America are being reshaped. Even though some niche markets have already seen leaders emerge, overall penetration, product depth, and regional expansion are still underway.

Many fintech and crypto companies in the United States are facing a more mature and crowded existing financial system. What they are competing for is not only users, but also payment gateways, account relationships, clearing paths, and the right to define regulations.

The repeated setbacks to the 2026 U.S. Crypto Market Structure Act illustrate this point. The obstacles stem from both ongoing disagreements within Congress regarding stablecoin yields, token classification, and regulatory authority, and from the traditional banking system's wariness of stablecoins, trust licenses, and the deposit substitution effect.

However, Latin American companies are entering markets that help transition from inefficient old systems to new ones. The reasons for user migration are stronger, and growth potential comes more from new penetration and structural upgrades. These two approaches have completely different capital pricing logics. The former is more about competing for existing market share, while the latter is more about capturing incremental growth.

However, returns always come with risks. What truly attracts American financial institutions to Latin America has never been low risk, but rather high value density. But the other side of high value density is often a more complex regulatory, foreign exchange, and macroeconomic environment.

For US financial institutions, the opportunity lies not in simply replicating domestic products, but in truly establishing payment, clearing, dollarized value storage, and compliance capabilities as infrastructure in a high-friction market. However, this path is fraught with challenges. As Ripio CEO Sebastián Serrano stated, "Financial services are highly localized." Therefore, even crypto giants like Coinbase have suspended their services in Argentina due to various internal considerations.

Therefore, Latin America is not an easy arbitrage game, but more like an endurance race that demands higher levels of execution, risk control, understanding of licenses, and localized operations.

In this race, we have already seen concrete realities: from street vendors in Rio de Janeiro displaying Pix QR codes for payment, to families in Mexico City receiving USDC remittances from Chicago via WhatsApp, to freelancers in Buenos Aires receiving their remote work wages in USDT.

Whoever can transform these real financial pain points into sustainable, replicable, and cross-regional scalable service capabilities will be the ultimate winner.

Interactive Brokers now supports stablecoin deposits.

Popular Articles