LATAM stablecoin liquidity may depend on few providers, investor says
Researchers in a Latin American stablecoin ecosystem report warned “fragility in the system is concentrated in its thinnest layer,” with just 16 of 494 companies focused primarily on wholesale liquidi...
Asanat Analysis — Why it matters
Latin America's stablecoin infrastructure faces a structural vulnerability typical of emerging market financial rails: liquidity provision is concentrated among a small oligarchy. When 16 out of 494 entities control wholesale liquidity flows, the system exhibits classic counterparty risk clustering. A single operational failure, regulatory action, or loss of confidence in one major provider could cascade through the entire ecosystem, similar to how FTX's collapse exposed concentration risks in crypto lending markets.
This fragmentation signals that LATAM stablecoin adoption has grown faster than the market structure supporting it matured. Native liquidity providers haven't yet emerged at sufficient scale or diversity. The finding mirrors pre-2022 observations about centralized exchange dominance in emerging markets, where infrastructure hasn't caught up to demand. For the sector, this suggests regulatory arbitrage and first-mover advantage (whoever captures liquidity provision first) will likely determine which stablecoins anchor regional payment rails over the next 2-3 years.
The warning also highlights why institutional participation remains cautious: professional treasurers and payment processors require redundant liquidity pathways. Until LATAM stablecoin markets develop deeper, more distributed market-making layers, adoption will plateau among risk-conscious entities. This creates pressure for either consolidation among the 16 providers or for regulatory frameworks that incentivize new entrants.