TL;DR
- A Varys Capital and Verda Ventures report analyzed 494 Latin American companies but found only 16 focused primarily on wholesale stablecoin-to-fiat liquidity, treasury and credit.
- Verda Ventures partner Amit Chu warns that payment firms may ultimately depend on the same underlying liquidity desks, creating potential bottlenecks if banking access fails.
- The report does not measure transaction volumes or market share, so it identifies structural fragility rather than proving liquidity concentration.
Latin America’s stablecoin market may depend on a narrow layer of wholesale liquidity providers. A LATAM ecosystem report from Varys Capital and Verda Ventures analyzed 494 companies using the Stablescape database, but identified only 16 whose primary business centers on wholesale stablecoin-to-fiat liquidity, corporate treasury and credit. This matters as stablecoins increasingly sit behind payments and cross-border transfers. Amit Chu of Verda Ventures warns that the system’s fragility may be concentrated in the small group providing underlying liquidity.
Liquidity Concentration Could Create Bottlenecks at the Exit
Chu argues that many companies selling liquidity may ultimately route through the same group of desks and exchanges. Public data cannot show how many providers warehouse currency risk themselves versus passing it onward. The concern is therefore potential dependency beneath the visible payments layer, not proven market concentration. That distinction matters as businesses expand stablecoin-based cross-border payment infrastructure across fragmented banking systems.
If a liquidity provider lost banking access or failed operationally, Chu said the disruption would appear at the off-ramp. Spreads could widen, cash-outs to local bank accounts could slow or pause, and funds moving through the affected desk could become stuck. The risk is less about holding a stablecoin than about converting it efficiently into local currency when users need to exit. Similar concerns around routing have highlighted how provider diversification affects stablecoin FX costs.
The report does not establish how concentrated liquidity is. Stablescape does not track transaction volumes or market-share data, while exchanges and payment companies categorized elsewhere in the database also provide liquidity. Chu also cautioned that a small number of specialists is not automatically unhealthy because mature foreign-exchange markets similarly have fewer dealers than customer-facing firms. What matters is whether each major currency has several independent, well-capitalized providers with separate banking relationships and enough redundancy to absorb failures.
Chu sees licensing as the strongest lever for reducing concentration because clearer rules could make banks more willing to serve liquidity providers. He also pointed to local-currency stablecoins and global trading firms quoting Latin American currency pairs as ways to broaden settlement capacity. The opportunity remains substantial as fragmented banking and expensive transfers drive stablecoin adoption across Latin America. The next stage of growth may depend less on adding payment apps and more on strengthening the liquidity infrastructure underneath them.
