Written by: Zen

Ruben López, a stockbroker from Buenos Aires, spends a few minutes every morning completing a special "daily operation": he exchanges Argentine pesos on hand for dollars at the official exchange rate, then immediately converts the dollars on a trading platform into the stablecoin USDC, which is pegged 1:1 to the dollar, and then exchanges the stablecoin back to pesos at the parallel market rate.

With Argentina’s mid-term elections approaching, Argentine President Javier Milei tightens foreign exchange controls to support the peso’s exchange rate, yet Ruben effortlessly earns an arbitrage profit of about 4% within no more than 10 minutes daily.

Meanwhile, Mexican immigrants living in the United States open WhatsApp, send a few messages, along with USDC stablecoins, and their family back in Guanajuato can receive payments settled in Mexican pesos on their phones within two minutes.

Over the past few years, Latin America, long regarded as a high-volatility, high-risk, and high-uncertainty region, is increasingly seen by American payment giants, venture capital firms, and stablecoin startups as a vital battleground for the next round of financial infrastructure reconstruction.

In February 2026, Visa announced that it would acquire Argentinian payment platforms Prisma and Newpay from Advent International to enhance its digital payment and infrastructure capabilities in Argentina. In March, Latin American financial application ARQ, focused on stablecoins, disclosed it completed a $70 million funding round, with participation from Sequoia Capital and Founders Fund. ARQ builds infrastructure connecting traditional banking networks with stablecoin-based payment systems, enabling users to hold foreign currency and conduct transactions.

Putting these cases together, it is evident that what American capital is focused on is not merely any high-growth company, but rather positioning itself at key nodes in the reconstruction of the Latin American financial system: whoever controls payment gateways, clearing networks, account relationships, and dollar-denominated savings tools has a better chance of gaining the upper hand in the next stage of competition.

Financial friction pain points establish Latin America's high-growth potential

The fundamental reason Latin America has become a major battleground for fintech and stablecoin companies is that financial friction here is not an abstract proposition, but a collection of real problems that can be repeatedly validated by macroeconomic indicators, payment scenarios, and on-chain activities. The financial needs in this region are not singular, but exhibit a clearly stratified structure.

In countries like Brazil and Mexico, where inflation is relatively controlled, users' most immediate pain points often do not revolve around currency depreciation, but rather high payment costs, slow cross-border transfers, and inefficient account services. According to a World Bank report, the average cost of sending a $200 remittance globally in the first quarter of 2025 was still as high as 6.49%, while the average cost for digital channels was around 5%. In typical scenarios of remittances between the U.S. and Mexico, traditional channel costs can reach as high as 5% to 7%. For such markets, the value of fintech primarily lies in making payments, clearing, and cross-border remittances cheaper, faster, and smoother.

On the other hand, in high-inflation economies like Argentina, the issue is not just payment efficiency, but how to preserve the value of funds. For users in high-inflation markets, fintech and stablecoins primarily aim to solve the issue of value preservation rather than optimizing the experience. Specifically, it concerns how to hold relatively stable assets more conveniently and how to conduct cross-border dollar transactions with lower friction.

In addition to inflation differentiation and cross-border remittance costs, another notable feature of the Latin American financial market is that users have been extensively educated to embrace digital payment systems in recent years, but this imperfect system has yet to fully address cross-border, value-preservation, and "dollarization" issues.

According to the World Bank's Global Findex and related public materials, the penetration rate of digital payments has reached a high level in many Latin American countries. For instance, in Brazil, the World Bank document indicates that by 2024, 70% of adults had made digital payments; in Argentina, the corresponding rate under previous Findex standards had reached about 72%. This signifies that many core markets in Latin America no longer need to educate users from scratch, but have entered a competitive phase focused on efficiency, cost, and depth of scenarios.

Take Brazil's Pix as an example; it has evolved from a transfer tool into a de facto social-level payment infrastructure. According to public data compiled by the European Payments Council, as of March 2024, Pix had approximately 153 million individual users and 15 million business users; the total number of transactions throughout 2023 was around 42 billion, with a transaction value of about 17.2 trillion reais.

However, while local digital payment networks are indeed developing, not all financial needs can be met for users in the market. Local transfers may become increasingly smooth, but once it comes to cross-border settlements, dollar preservation, hedging against currency depreciation, or low-cost global receiving and paying, the friction within the existing system remains very evident.

It is here that stablecoins begin to transform from crypto assets into realistic financial tools. A compelling case is the remittance corridor between the U.S. and Mexico. Research from Mizuho Bank shows that through cooperation with exchanges like Bitso and platforms like Félix Pago, the remittance cost using stablecoins such as USDT and USDC has dropped to below 1%. Currently, the stablecoin flow processed by Bitso has reached $6.5 billion, accounting for 10% of the annual remittance market of $63 billion between the U.S. and Mexico.

These on-chain data already demonstrate that Latin American users are not simply experimenting with stablecoins; they are treating them as real usable dollarization tools, serving both cross-border dollar flow and value storage functions. The International Monetary Fund (IMF) estimates that by GDP ratio, "Latin America and the Caribbean" is one of the regions with the most significant use of stablecoins globally, at around 7.7%.

Moreover, Chainalysis' 2025 report on Latin America shows that from July 2022 to June 2025, Latin America’s cumulative crypto trading volume approached $1.5 trillion. Among them, Brazil is the largest market, receiving around $318.8 billion in crypto assets, Argentina approximately $93.9 billion, and Mexico about $71.2 billion. In terms of stablecoin proportion, Chainalysis' 2024 report states: Argentina's stablecoin trading volume accounted for 61.8%, Brazil 59.8%, both significantly above the global average level of 44.7%.

Certainty and growth potential in the financial market

In Latin America, demand has arisen, transactions have formed, and data can validate them, yet the digitization of payments, accounts, and fund management remains on the rise, leaving room for significant market penetration growth. Therefore, the foundational structure of the market determines that Latin America has not only a growth story but also a confluence of certainty and potential growth that is hard to achieve together.

In terms of certainty, the data on the aforementioned market side is enough to prove the real existence of demand, while growth potential comes from the medium- to long-term trends of payment and account digitization.

McKinsey's research on payments in Latin America highlights that among its sample of Spanish-speaking countries, debit cards overtook cash as the consumers' 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 visibly shifted towards non-cash tools.

From a more macro perspective, payment digitization is not just an upgrade for consumer convenience; it is also driving a reconfiguration of financial flows on the enterprise side. The Inter-American Development Bank report indicates that the share of digital payments in offline consumption scenarios in Latin America has risen from about 11% in 2020 to 30% in 2024. Meanwhile, over 70% of enterprises in Latin America and the Caribbean have engaged in digital procurement.

This indicates that digitalization not only permeates individual transfers and payments but also extends to enterprise receiving and paying, reconciliation, fund pooling, and procurement management. For fintech companies, this will bring about a larger addressable market. For example, Payoneer recently enhanced its local receiving capabilities in Mexico, assisting global sellers to receive payments in Mexican pesos directly from domestic e-commerce platforms, thereby reducing exchange costs; while Jeeves launched stablecoin-supported corporate cards targeted at Latin American businesses, aiming to reduce cross-border settlement times 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 emergence as a technological tool for addressing dollar demand and cross-border settlement issues.

With remittance volumes consistently high and the costs of cross-border payments remaining rigid over the long term, the integration of stablecoins with local payment tracks seems more like filling structural gaps in the real financial system rather than providing a short-term speculative tool.

There are already stablecoin payment services taking preliminary steps in Argentina; for example, the Argentinian fintech company Takenos, led by Variant Fund and Lattice Capital, announced that by March of this year, its stablecoin solution based on the Solana blockchain had processed over $500 million in cross-border payments, serving 500,000 users across 20 Latin American countries, mainly for salary payments and business transactions.

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

Unlike the highly mature, intensely competitive, and already well-educated market in the U.S., many fintech and crypto financial segments in Latin America are still in the stage where infrastructure is taking shape, but the landscape has not yet been fully established. For VCs, this typically indicates a better entry point.

In recent years, financing in Latin America has consistently grown, with capital flowing more towards mature companies that have adapted to market changes and possess more robust models. Among them, local funding still tends to focus more on early-stage ventures, while foreign capital, represented by U.S. investments, is more inclined to enter when companies have matured and become scalable, waiting for models to be preliminarily validated and scalability to emerge before stepping in as amplifiers.

In contrast to Latin America, U.S. users completed their education early, infrastructure has long been mature, and the division of labor among leading platforms and existing financial institutions is more entrenched. Later entrants can either only carve out very narrow niches, incur extremely high customer acquisition costs, or merely snatch market share from existing giants. In comparison, the boundaries of financial services in Latin America are being redefined; even if some segments already have leaders, overall penetration, product depth, and regional expansion are still in progress.

Many fintech and crypto companies at home in the U.S. face a more mature and crowded legacy financial system. What they contend for is not only users but also payment gateways, account relationships, clearing paths, and regulatory definitions.

The repeated setbacks surrounding the 2026 U.S. crypto market structure bill highlight this point. Its resistance comes both from ongoing disagreements in Congress regarding stablecoin yields, token classifications, and regulatory powers, as well as traditional banking systems' wariness of stablecoins, trust licenses, and the substitution effect on deposits.

However, Latin American companies are entering markets that help transition from an inefficient old system to a new one, providing stronger reasons for user migration and growth opportunities largely deriving from new penetration and structural upgrades. These two dynamics are entirely different in terms of capital pricing logic. The former resembles competition for existing stock, while the latter resembles capturing incremental growth.

That being said, returns are always accompanied by risks. What truly attracts U.S. financial institutions to Latin America is never low risk but high value density. However, the other side of high value density is often a more complex regulatory, foreign exchange, and macroeconomic environment.

For American financial institutions, the opportunity lies not in simply replicating domestic products but in genuinely building payment, clearing, dollar-preserving storage, and compliance capabilities as infrastructure in a high-friction market. However, this path is fraught with challenges. As Ripio’s CEO Sebastián Serrano stated, "Financial services have a strong localization attribute." Thus, even crypto giants like Coinbase have paused their services in Argentina due to various internal considerations.

For this reason, Latin America is not an easy arbitrage game; it resembles a stamina race requiring higher execution capability, risk control competency, understanding of licenses, and localized operational requirements.

In this competition, we have already seen tangible realities: from street vendors in Rio de Janeiro displaying Pix QR codes for payments, 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 regionally expandable service capabilities will be the ultimate winner.

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