Don’t copy fiat’s bottlenecks: Stablecoins can actually work in LATAM | Opinion

Latin America has no shortage of potential. It’s rich in resources, talent, and geography, but lacks the infrastructure to connect them all. Overregulation, fragmented FX markets, and political shifts have built walls where there should be bridges, and the result is a collection of economies that move slowly, even when opportunity is within reach.

Let’s say a small agribusiness in Argentina ships products to Brazil. The truck gets there in days, but the payment takes weeks, riddled by fees, currency swings, and manual reconciliation, creating infrastructure issues and delays.

Brazil’s PIX has proven what’s possible when money moves at internet speed: 24/7, instant, and low-cost. But the moment the funds cross the border, they run into barriers in the form of capital controls, correspondent banks, and dollar dependency.

This is where stablecoins come in to link Latin America’s broad financial landscape. Its purpose isn’t to replace a system like PIX, but to extend its reach across the region.

That promise, however, depends on regulation. Risk-based, proportional rules can make stablecoins a tool for integration, but copy-paste rules will only replicate fiat’s bottlenecks in digital form. The real test for Latin America isn’t whether it adopts stablecoins, but whether it uses them as a tool that can finally bridge isolated financial systems, or whether it will just end up adding another layer of friction.

Regional integration demands alignment

Bringing stablecoins to Latin America means first confronting a whole set of structural challenges. While diversity gives Latin America its resilience, it also creates fragmentation. Progress begins with regional alignment, with clear standards for licensing, reserve management, disclosure, and a unified KYC. This type of standardization is the foundation for trust and scale.

Equally as important is making regulatory measures risk-based and proportional. This means designing frameworks that don’t apply the same rules to small users as they do to multinational banks. That’s where stablecoins gain their utility, but if this approach aims to mirror those of the current financial system, it’ll just digitize the same flaws.

Simultaneously, stablecoin adoption should avoid undermining the existing banking system, payment rails, or the region’s flourishing fintech sector. Brazil’s PIX system is proof that domestic upgrades can expand access. As of October 2025, PIX had over 178 million users, representing 93 percent of Brazil’s adult population. But the lack of efficient cross-border capabilities puts strains on Brazilian businesses looking to compete globally, as well as residents looking to send or receive remittances.

Brazil already has this in production with BRL1, a real‑denominated stablecoin backed 1:1 and settled on public rails. The first live use case is straightforward and powerful: moving on‑chain Brazilian reais between three domestic exchanges, which collapses inter‑venue settlement from hours to seconds and frees capital that would otherwise be trapped in pre‑funding. Plug-in PIX sits at the edges for pay‑in and pay‑out, providing programmable liquidity that links retail payments, capital markets, and remittances on a single, auditable rail.

The role of stablecoins isn’t to replace financial systems that have had an impact, but to complement them. Their value lies in extending similar access and connectivity to economies and populations that are still excluded from such infrastructure. Setting standards before scaling isn’t a bureaucratic strategy; it’s how lasting systems that have a real impact are built.

From policy to practice

Once a regulatory foundation is put in place, the real test comes down to execution. Stablecoin regulations and pilot programs shouldn’t be about competing with TradFi but rather extending domestic rails into cross-border and multi-currency environments. This would support economic growth through logical regional integration.

To understand this better, consider the difference between a $50 remittance from a worker in the U.S. to their family in Mexico and a $5 million corporate treasury transfer. If they apply one-size-fits-all rules, smaller users get priced out by compliance costs, ultimately defeating the entire purpose. Proportional rules make systems secure and inclusive for all users.

In Mexico, for example, stablecoins can power round-the-clock USD to MXN remittances with cleaner reconciliation for SMEs. In Venezuela, high‑risk corridors can be kept open with strict sanctions screening and end‑to‑end analytics, preserving humanitarian and SME flows without compromising compliance.

And the opportunity goes far beyond payments. These same rails can be used to tokenize private credit from small and medium-sized enterprises, turning real-world receivables into investable digital assets. This brings about a new type of financial inclusion, one that connects small businesses to global capital and investors seeking yield, all through transparent, compliant, on-chain infrastructure.

However, it’s important to remember that unlocking this requires regional cooperation to move beyond its isolationist tendencies, replacing fragmented national approaches with a unified framework.

The ultimate test for stablecoins isn’t in their branding, but their performance. They should be judged based on settlement speed, cost, error rates, and FX transparency, not by slogans. If the policy repeats the mistakes of historical systems, the same roadblocks will reemerge. But if regulators get it right, Latin America will progress from just debating financial inclusion to delivering it, across borders, and in real time.