🌎 Why Latin America Needs Local Stablecoins

The future is local, and it’s onchain

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Frontera EC & Joker
March 28, 2025

đź‘‹ Welcome to Frontera, the newsletter showcasing the reality of crypto in Latam. Join industry leaders from the Ethereum Foundation, the Solana Foundation, Binance, Crypto.com, dYdX, and others to discover why Latin America has become one of the most dynamic and promising regions in the crypto world and how you can tap into this market.

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🗺️ Why Latin America Needs Local Stablecoins

Latin America is primed for a financial revolution, and local stablecoins can be the key that unlocks its full potential. 

With the region facing currency instability, high inflation, and a growing demand for accessible financial solutions, the need for stable and efficient digital currencies has never been more urgent.

In this report, we’ll explore why Latin America, particularly Mexico, stands at the crossroads of this revolution, delving into its market size, the opportunities local stablecoins present, and how innovators like Etherfuse are paving the way for the region’s financial future.

đź“Š Market Size: Remittances and Money Flows

Latin America's cross-border money flows are enormous, and they're not slowing down soon.

Beyond remittances, the Mexican peso (MXN) sees heavy trading in global markets.

  • MXN is the world’s 16th most traded currency, and 3rd among emerging markets.

  • It has an average FX daily turnover of $114 billion.

  • This deep liquidity reflects significant international business, investment, flows involving MXN. Yet, converting money across borders or into/out of MXN remains inefficient with cross border payment fees averaging 5.8% in 2023.

  • Also, an estimated 5.9 trillion MXN is currently sitting idle in Mexican bank accounts.

These figures highlight both the scale of Latin America's money movement and the pain points in the process.

đź’° Opportunity Size

The sheer scale of these flows hints at a huge opportunity for disruption. If fintechs captured even a fraction of this market, the impact would be measured in billions.

In fact, Bitso, the leading crypto company in Latin America, is already processing over 10% of the US-Mexico remittances by leveraging stablecoins, as seen in our Bitso’s 2024 Report: Bullish or Bearish? article.

In Latam, even a 10% shift to digital stablecoins would channel $16B through cheaper, faster rails. 

Such a shift would cut fees from 6% to near-zero, saving Latin Americans hundreds of millions of dollars. Lower-cost, near-instant transfers mean more money arriving in families' hands to pay for necessities and businesses settling invoices in minutes instead of days.

With the Mexican peso’s $114 billion FX turnover and Latam's $163 billion remittance pool, the opportunity to go onchain is undeniable, and it would be massive. 

🪙 The Case for Local Stablecoins

Stablecoins are already reshaping how fiat is used and what money truly means. In 2024, USD-pegged stablecoins like USDC and USDT processed $15.6 trillion worth of transaction value, 119% and 200% that of Visa and Mastercard.

This trend is effectively segregating fiat use cases: people in emerging markets are turning to digital dollars when local currencies falter, using stablecoins to store value or move money outside of bank constraints.

Stablecoins now comprise 60% of crypto transaction volume in Argentina and Brazil. As seen in our Bitso’s 2024 Report: Bullish or Bearish? article, 39% of all new crypto purchases in the region are now USDT or USDC.

Users will adopt stable digital money for convenience and stability, but so far it has been mostly foreign tokens filling the void.

Ironically, the dominance of USD stablecoins highlights the need for local stablecoins. Latin Americans' financial innovations shouldn't depend on dollarization nor solely rely on a foreign currency. Dollar stablecoins don't address local needs like domestic lending, local credit markets, or integration with regional monetary policy.

USD stablecoins have paved the way, but local stablecoins are now needed to fully realize Latam's potential, and here's why.

🛠️ Real-World Application

Remittances & Payments – Faster, Cheaper, More Liquid

A peso or real-backed stablecoin can dramatically improve remittances and everyday payments. Instead of paying a 6% fee and waiting days, a migrant worker in the US could send a MXN stablecoin home within minutes for pennies in fees. 

Yes, dollars are nice, but pesos (or whatever currency) are still needed in the local economies. Channeling more of MXN’s FX turnover and the country’s remittance pool through stablecoins means more money stays in the community. 

By improving speed, liquidity, and access, sending money becomes as easy as sending a text.

DeFi and Local Liquidity – Lending, Futures, and Fintech Integration

Beyond person-to-person payments, local stablecoins unlock interoperability in decentralized finance. With a liquid MXN or BRL onchain, Latin American users can participate in DeFi using their own currency.

This enables peso-denominated lending and borrowing, so a Mexican user can take a loan without exposure to USD exchange risk, and without intermediaries. It allows the creation of local currency futures and derivatives, for example, you could hedge MXN interest rates or trade commodities on DeFi platforms in MXN terms.

Local stablecoins would also let regional startups plug into global liquidity. As seen in our Mexico: A Fertile Ground for Crypto Adoption report, there are 1104 mexican fintechs, and all of them could use stablecoins to provide decentralized financial products, cross-border payment solutions, and yield-bearing saving accounts, without ever abandoning the peso.

⛓️ Local Stablecoins are Already Here

Local stablecoins are not a concept for the future, they're already here. 

Brazil led the charge with BRZ, which currently averages $470.5K in monthly onchain volume on its Uniswap BRZ/USD pool. The recent launch of BRL1 of the XRP ledger with an initial issuance over $10 million USD further underscores the commitment to the asset class, with a projected volume of over $8.7 million in its first year.

In Mexico, Tether launched its own peso-backed stablecoin, MXNT, but it has near-zero volume and seems discontinued as we have seen no developments in three years. Bitso just relaunched their own version on Arbitrum, which we will cover in detail below. MXNB was previously released on the Ethereum mainnet but failed to gain traction, having only 65 holders and 323 total transfers.

But it's Etherfuse that takes the spotlight. 

Backed by Mexican government bonds, Etherfuse’s sovereign coin model introduces a unique stablecoin structure. By utilizing tokenized government bonds, MXNe offers a stable, low-risk asset that draws value from real government-backed bonds. 

Etherfuse’s Stablebonds bridges traditional finance with decentralized finance, allowing developers and fintechs in Mexico and Latam to create financial products that not only interact with the DeFi ecosystem but also provide real yield, a feature most other stablecoins cannot offer.

While these volumes are still relatively small compared to giants like USDT, they prove the concept: there is real need and demand for regional stablecoins.

The future is local, and it’s onchain.

đź“° Latam Crypto News đź“°

🇧🇷 Brazil

Coinbase challenges Brazil’s proposal to ban stablecoin transfers to self-custody wallets. They argue that self-custody is essential for decentralized finance and presented alternative solutions to address regulatory concerns.

Ribus partners with Binance to integrate Binance Pay, enabling secure and fast crypto payments for luxury property rentals in Brazil. Users can now access up to 80% discounts with crypto on high-end properties.

Cainvest introduces a product offering 85% capital protection against Bitcoin devaluation, while allowing investors to capture up to 40% of its appreciation. Aimed at reducing crypto market volatility risks, this solution blends security with return potential, available through traditional banking platforms.

🇦🇷 Argentina

Argentina’s Senate held its first Bitcoin conference, featuring key industry experts discussing regulation and Bitcoin’s role in the economy, with bipartisan support to integrate Bitcoin into the country’s legal framework.

🇦🇷 Merge Buenos Aires wraps up

MERGE Buenos Aires concludes successfully with over 5,000 attendees, 220+ speakers, and 60+ sponsors.

🇲🇽 Mexico

Bitso unveils Juno, a new company focused on strengthening digital infrastructure and advancing stablecoins in Latin America. Juno will relaunch Bitso’s $MXNB, a peso-backed stablecoin on Arbitrum, initially available for businesses and institutions, enhancing financial efficiency across the region.

Bitso Business is hosting Latin America's first stablecoin conference, gathering over 1,000 experts on August 27-28 in Mexico City. We at Frontera will be there to keep you covered.

🇵🇪 Peru

Peru’s Congress has approved the use of blockchain technology for virtual voting by citizens abroad, aiming to make elections more secure, transparent, and accessible. The bill, introduced by Congressman Jorge Zeballos Aponte, was passed with broad support.

🇵🇾 Paraguay

Hive Digital has acquired a Bitcoin mining plant from Bitfarms for $56M in Paraguay, expanding its footprint in Latam and increasing its global mining capacity.

🇵🇦 Panama

Congressman Gabriel Solis proposed a regulatory framework for cryptocurrency use in the country, aiming to create clear legal guidelines for the industry and promote digital asset adoption.

👤 Guest Episode 👤

In this week’s guest episode, we sat down with Dave from Etherfuse to discuss how they're reshaping the future of DeFi by tokenizing government bonds.

Watch the full conversation here 👇