Stablecoins in Latin America

In recent years, stablecoins have emerged from the shadows of the crypto world to become key players globally, especially in Latin America—a region marked by both challenges and opportunities. While the United States has shaped the global stablecoin market through innovation and intense regulatory debates, in LATAM, stablecoins have already hit the streets, digital wallets, and businesses—transforming the way people pay, save, and envision the future.

What makes this technology a game-changer in Latin America? And how can it open doors for your business? Let’s explore how stablecoins are gaining traction—and discover why Lumx is leading the way.

Why has Latin America become stablecoin territory?

Latin America’s embrace of stablecoins is no coincidence. In 2024, four countries in the region—Argentina, Brazil, Mexico, and Venezuela—ranked among the top 20 in Chainalysis' Global Crypto Adoption Index, which measures crypto adoption worldwide. This is not a passing trend; it is a necessity shaped by decades of economic instability and financial systems that leave millions behind. Here’s why stablecoins are taking off in the region:

• A shield against monetary collapse: In Argentina, annual inflation reached 211.4% in 2023 (INDEC), while Venezuela’s bolívar has lost nearly all its value since 2013 (Central Bank of Venezuela). Stablecoins like Tether (USDT) and USD Coin (USDC) have become reliable refuges—providing access to digital dollars without relying on offshore banks.

• International payments without the hefty fees: The SWIFT system imposes average fees of 1.5% to 2.9% (which, when converted to local currencies, results in even higher costs) and delays of up to five days. Stablecoins eliminate these bottlenecks: transactions on EVM networks cost between $0.01 and $1 and are settled within minutes. In Mexico, 68% of crypto users prefer stablecoins for remittances due to their speed and low cost (Bitso).

• Financial inclusion in the palm of your hand: The World Bank estimates that 70% of Latin Americans own smartphones, yet 30%—about 195 million people—remain unbanked. Stablecoins turn smartphones into financial tools. In Colombia, platforms like Valiu use stablecoins to pay informal workers in remote areas.

In Latin America, stablecoins are more than just a tool—they are a solution in a complex and challenging economic landscape.

Stablecoins vs. Banks

Many see stablecoins as a threat to traditional banks, but in reality, they complement the financial system. Rather than replacing banks, stablecoins fill gaps where traditional institutions fall short—offering solutions that can coexist and even enhance existing services. Here's how they compare:

• Operational flexibility: Banks operate within business hours and follow rigid processes. Stablecoins function 24/7. In 2024, Bitso reported that 40% of stablecoin transactions in the region occurred outside banking hours, meeting a demand traditional banking cannot fulfill.

• Stability in uncertain times: In economic crises, stablecoins like USDC provide a reliable alternative, pegged to the dollar and audited by reputable firms.

• Connection to emerging technologies: Traditional banks are slow to integrate new technologies. Stablecoins already operate natively on blockchains, facilitating integration with fintechs and decentralized finance (DeFi) platforms. In 2024, Mercado Pago started accepting USDT deposits in Brazil—a move banks are still cautiously exploring.

This relationship is not about competition but synergy. Fintech companies are already combining stablecoins with banking services, creating hybrid models that expand financial access. Institutions like Banco Azteca, which is testing USDC withdrawals at ATMs, show that collaboration can bring mutual benefits and strengthen the region’s financial ecosystem.

How are stablecoins being used?

In Latin America, stablecoins have moved beyond financial speculation and are actively integrated into everyday operations for individuals and businesses. Their use reflects a direct response to regional needs, providing practical and measurable solutions:

• Freelancers & Remote Workers: In Argentina, freelancers use USDC for international payments, avoiding currency conversion fees that can reach 10%.

• Small Businesses: In Colombia, merchants use stablecoins to protect inventory value against the peso’s depreciation, which fell 11.8% in 2023 (Banco de la República).

• International Remittances: In 2023, remittances to Latin America hit $156 billion. In 2024, 30% of U.S.-Mexico remittances used stablecoins, reducing transaction costs from 6% to under 1%.

Beyond these cases, stablecoins also hold huge potential for foreign exchange (FX), over-the-counter (OTC) trading, banking, brokerage firms, and payroll solutions. They allow businesses to instantly convert currencies, settle large transactions efficiently, integrate payments into traditional systems, and pay employees in real-time—a key advantage that Lumx leverages to connect businesses to this new digital economy.

Strategic opportunities

In this rapidly advancing financial digitization landscape, stablecoin technology is opening new opportunities, offering companies and investors the chance to test and implement additional use cases. With a market in full expansion and practical cases already underway, the opportunities are clear and tangible:

• Yields in Decentralized Finance: Lemon reports that stablecoin rates on Aave reached 7.17% in 2024, surpassing traditional banking returns.

• Tokenization of Real Assets: In Brazil, Vitreo tokenized R$ 50 million in real estate in 2024, using stablecoins as a foundation.

• Market Growth: The stablecoin volume in the region reached $168 billion in October 2024. In Mexico, USDT usage has grown 300% since 2022.

These are just a few examples that show how stablecoins are not just a technical resource but a strategic asset capable of driving sustainable business growth.

The stablecoin market in the region is booming, with projections indicating that transaction volumes could exceed $100 billion by 2028, driven by regulations and integrations such as Pix and SPEI.

We understand that integrating a new technology still under regulatory development, even in a landscape full of opportunities, can be challenging. That is why, in times like these, it is essential to rely on brands that offer not only credibility but also a robust technological infrastructure, enabling innovation without the fear of unforeseen risks.

This is exactly why Lumx is leading the transformation with stablecoins. Through strategic partnerships, such as our collaboration with BTG Pactual, our end-to-end orchestration services ensure that clients explore the stablecoin ecosystem securely and seamlessly.