Stablecoins & Cross-Border
Payments in Latin America

I've been a progressive voice on digital finance since the early days of the internet. My banking career started in the late 1980s at First Chicago Bank — now part of JPMorgan Chase — where I was mentored by senior leaders who were early champions of ACH. In those days, checks ruled consumer and corporate payments, and the banking world was only beginning to take electronic alternatives seriously. Debit cards and ACH were barely emerging as alternatives to cash and checks. That experience shaped me: I've been an advocate for digitizing finance ever since.

For years, a fully digital money ecosystem felt aspirational rather than achievable. That changed as the building blocks fell into place — large-scale technology platforms across the banking sector, global connectivity at both the consumer and corporate level, and then the arrival of Bitcoin in 2008–2009, followed by stablecoins and central bank digital currencies. The moment it stopped being theoretical for me was when the scale got too big to dismiss: by mid-2025, stablecoins had moved more than $4 trillion in transaction volume in the first seven months of the year alone, and by some measures their transfer volume had already rivaled the major card networks. That's infrastructure! The one piece still catching up is regulation — the protections, oversight, and controls that turn a parallel system into a trusted one.

I want to be precise here, because I didn't convert a remittance operation onto stablecoin rails — so I'll answer as someone who spent a career on the traditional side watching this shift happen. What surprises me most is how quickly the economic argument has overtaken the ideological one. For years, crypto in payments was a philosophical debate. Today it's an operations and treasury decision. Industry surveys now put the total cost reduction from stablecoin rails in the 30–50% range once you account for transaction fees, FX spread, float, and intermediary deductions. When the savings are that structural, adoption stops being a matter of belief and becomes a matter of timing.

The equation is cost, speed, and access, and stablecoins move all three in the right direction. According to the Inter-American Development Bank, remittances to Latin America and the Caribbean reached a record $173.7 billion in 2025, up 7.3% over the prior year. On the cost side, the World Bank's Remittance Prices Worldwide database puts the global average cost of sending remittances at 6.36% — still more than double the UN's 3% target — while digital-only channels average around 4.6%. Stablecoin-based operators are pushing well below that: in the US–Mexico corridor, Bitso has processed roughly 10% of the flow on crypto rails, and Felix Pago has moved over $1 billion through a USDC-to-SPEI model that settles via WhatsApp at fees well under the incumbents'.

What's pushing this toward the mainstream is policy on both ends. A new 1% US excise tax on remittances, enacted in July 2025 and effective January 1, 2026, applies only to transfers funded with cash, money orders, or cashier's checks — bank-account, US-card, and crypto-funded transfers are outside its scope. That structurally favors digital and stablecoin channels, even if the early data shows limited impact so far. The gating factor on the receiving end is regulatory clarity. Most large-scale technology and infrastructure providers are well positioned to integrate; it's the rules of the road that lag. Mexico is a good example — stablecoins currently sit in a separate regulatory lane, outside the "virtual asset" rules, while Banxico keeps banks at arm's length under Circular 4/2019, and modernization is actively underway. Once those hurdles clear, this becomes a fast-moving train driven by large fintech players partnering with the handful of early-adopter banks in each country.

The fragmentation is real, and it's worth being honest that some of these experiments have been recalibrated. El Salvador amended its Bitcoin Law in January 2025, under its $1.4 billion IMF arrangement, to make private-sector acceptance voluntary and end tax payments in Bitcoin — effectively pulling back from the legal-tender experiment. Brazil's Drex has been the opposite of a straight line: the central bank dropped most of the blockchain and tokenization elements for its initial 2026 launch, citing immature privacy solutions, and a senior official publicly questioned in early 2026 whether the country even needs a retail CBDC given how well Pix already works. Meanwhile Brazil moved decisively on the private side, bringing stablecoin transactions under its foreign-exchange framework — the same rules that govern traditional remittances.

So you have three different philosophies in three flagship markets — the US going stablecoin-first, Brazil regulating stablecoins as FX while hedging on its CBDC, Mexico staying permissive but conservative. My advice to banks is to stop waiting for a harmonization that isn't coming on their timeline. Build the strategy now, on the assumption that regulation will eventually pass, and have a draft plan for where stablecoin rails fit in your priorities. The banks that get caught flat-footed will be the ones that treated this as someone else's problem until the train had already left the station.

I'd push back gently on the word "tension." It isn't innovation versus compliance — it's the absence, until recently, of a rulebook that aligns stablecoins to the reality of managing cross-border flows under existing AML obligations. That gap is now closing. In the US, the GENIUS Act became law in July 2025 and established the framework — the first federal regime for payment stablecoins, with 1:1 reserves and monthly reserve attestations. The live work today is the AML and Bank Secrecy Act rulemaking, which the Treasury is writing in coordination with the banking regulators; the OCC issued its first proposed rule in early 2026. Once those rules land, much of the perceived tension dissolves into ordinary compliance.

The data supports the optimistic read. Roughly 99% of stablecoin activity is licit — but it would be naive to ignore that stablecoins still accounted for around 60% of illicit crypto volume in early 2025, which is precisely why the rulebook matters. The regulated rails being built in this region increasingly bake travel-rule compliance and OFAC screening in at the protocol level. The institutions that win will be the ones that treat AML as a design requirement, not an afterthought.

Start with an honest assessment of your own risk profile and your real appetite for cross-border activity today. A bank that is highly risk-averse under the current regime needs to decide, deliberately, whether it intends to keep that posture in a more digital future state — because those two things are increasingly in conflict. In parallel, you have to educate your own people. There are still significant misconceptions and gaps in understanding among traditional bankers about how this actually works, and you can't execute a strategy your own team doesn't believe in.

Concretely, I'd tell them to pick one corridor, run a controlled pilot through a regulated on/off-ramp partner, and learn on a contained footprint before scaling. The early-adopter playbook already exists in the region: Nubank embedded USDC into its platform for its customer base across Brazil, Mexico, and Colombia; BTG Pactual, Latin America's largest investment bank, issued its own bank-backed dollar stablecoin; and Itaú, Brazil's largest bank, integrated crypto and took part in the central bank's DLT cross-border experiments. You don't have to invent the path. You have to choose to walk it.

The single biggest fear I hear from bankers is disintermediation — the worry that banks get cut out of the payments chain entirely. There's a kernel of truth to it, but it's misunderstood. The bank will always have a role. The real question is what role, and that's determined by strategy, not by fate. A bank that engages thoughtfully can own issuance, custody, on/off-ramp, and FX. A bank that does nothing may find its role reduced to custodian of the underlying fiat — and for an institution that historically played a strong part in cross-border flows, that's a meaningful demotion it chose by inaction. Stablecoins aren't a wall to defend against. They're a new rail to plug into.

That stablecoins are quietly solving a problem the traditional system created. Latin America and the Caribbean have been hit hard by correspondent-banking de-risking — the withdrawal of US and European banks from the region over AML cost and risk concerns. The region saw active correspondent relationships contract by roughly 40% between 2011 and 2020, the most of any region in the world, with USD-denominated transactions and money-transfer operators bearing the brunt. That left families and businesses with less access to dollar payments and, over time, higher costs.

The concept that will matter most over the next three years is that stablecoins are gradually restoring that access — extending USD payments and money movement globally without the stringent gatekeeping the traditional banking system has imposed. Across the region, persistent inflation, currency volatility, and capital controls are already driving "digital dollarization": stablecoins account for more than 70% of crypto purchases in Argentina and more than half of exchange purchases in Colombia, while over 90% of Brazil's crypto flows are now stablecoin-related; in Mexico, dollar-pegged tokens are increasingly the rails behind the US remittance corridor itself. For a region that was being slowly cut off from the dollar, that's not a speculative story. It's a financial-inclusion story — and that's the frame banking professionals here need to internalize.