Key facts
- Latin America's stablecoin payment ecosystem may rely on a small group of liquidity providers.
- A report by Varys Capital and Verda Ventures analyzed 494 companies in the region.
- Only 16 companies focus primarily on wholesale stablecoin-to-fiat liquidity, corporate treasury, and credit.
- Amit Chu of Verda Ventures stated that system fragility is concentrated in its thinnest layer.
- Stablecoins represented 32.1% of cross-border crypto value in Latin America by June 2026.
- Disruptions to key providers could cause wider spreads and delays in cashing out to local currencies.
Latin America's growing stablecoin payment ecosystem may be vulnerable due to a concentration of wholesale liquidity providers, according to a report by crypto venture firms Varys Capital and Verda Ventures. Amit Chu, a partner at Verda Ventures, warned that the system's fragility lies in its "thinnest layer," with only 16 out of 494 analyzed companies primarily focused on providing wholesale stablecoin-to-fiat liquidity, corporate treasury, and credit.
Chu explained that while many firms sell liquidity, few specialize in it. He expressed concern that many of these specialists might be passing currency risk to the same few desks and exchanges, creating a point of failure. A disruption affecting a key provider could lead to wider spreads, slower cash-outs into local currencies, and potentially frozen funds in transit.
Despite the concerns, the report did not establish the exact degree of liquidity concentration, as Verda's Stablescape database does not track transaction volumes or market share. While exchanges and payment companies also supply liquidity, Chu believes some may ultimately rely on the same underlying desks.
To mitigate this concentration, Chu suggested clearer licensing rules to facilitate banks serving liquidity providers and the development of local-currency stablecoins to enable more on-chain settlements. He also noted that global trading firms are beginning to quote Latin American currency pairs. However, Chu cautioned against assuming a small number of specialists is inherently problematic, drawing a parallel to mature FX markets which also have fewer dealers than customer-facing firms, emphasizing the importance of redundancy and capital in specialized desks.