Over the past decade, stablecoins have transitioned from a niche experiment to the most prominent use case in the crypto ecosystem. Early crypto transactions relied on Bitcoin as the primary settlement asset, but its price volatility and relatively slow settlement made it inefficient for this purpose. The introduction of USD-pegged stablecoins in 2014—led by Tether—offered a solution by combining blockchain’s transparency and settlement speed with the price stability of fiat currency. Today, USD-backed stablecoins account for the vast majority of value in circulation and more than two-thirds of all cryptocurrency transaction volume, according to Chainalysis.

“In my view stablecoins have already become a global payment rail, having pretty much matched VISA’s network last year in volume of transactions settled. Furthermore, recent developments in use cases that merge stablecoins with established settlement networks, such as Gnosis Pay, which enables stablecoins payments on a Visa debit card, will lead to increased mainstream adoption.”

— Rafael Pereira, CEO at Gnosis Pay

In 2024 alone, stablecoins processed over $13 trillion in transactions, putting them on par with Visa in terms of annual settlement volume. This growing scale underscores their role as a global payment rail connecting the traditional financial system with blockchain infrastructure.

Beyond volume, stablecoins introduce programmability—allowing value to move autonomously through code and enabling financial applications without direct reliance on traditional intermediaries. This has the potential to bypass legacy networks like SWIFT or card processors, enabling real-time, borderless and programmable transactions. In essence, stablecoins allow an internet of value where money moves as seamlessly as data.

To date, the stablecoin landscape has been dominated by USD-pegged tokens. However, local stablecoins are essential for unlocking stablecoins' full potential, particularly in emerging markets. They support intra-border settlement, local commerce, and offer a bridge between global digital currencies and local economies. In Brazil, this presents a unique opportunity due to its well-developed and mature financial system.

In this context, BRL stablecoins are becoming pioneers in the emerging market scene. Brazil’s PIX system has revolutionized domestic transactions and created the perfect infrastructure to move assets in and out of the blockchain. Furthermore, with a favorable regulator and a fintech-savvy population (the country already ranks 10th globally in overall cryptocurrency adoption), Brazil is positioned as a prime market for the next phase of stablecoin innovation.

As the market evolves, it has the potential to absorb a significant share of operations currently conducted on traditional rails. Last year, BRL stablecoins transacted over $920 million. Looking ahead, for example, in the Trade Finance and Remittance sectors, even if they capture just 10% of the existing market, BRL stablecoins could facilitate transactions exceeding $132 billion annually. This shift could generate savings of up to $6.6 billion by reducing transaction and intermediary costs. When considering additional market segments, such as credit, the overall cross-border payment market, and inter-protocol settlements, the impact could be even greater.

However, for this vision to materialize, several areas in the Brazilian stablecoin value need to advance.

The State of the Brazilian Stablecoin Value Chain3

On/Off Ramps and Payments

A functional on/off-ramp layer is essential for stablecoin adoption, as it enables users and businesses to move seamlessly between traditional financial systems and crypto-based environments. In Brazil, this layer is still developing, especially for stablecoins pegged to the real. While global stablecoins like USDT and USDC benefit from deep integration with exchanges and OTC desks, BRL stablecoins are only beginning to find practical use cases—primarily in B2B/B2B2C contexts.

Some companies are already incorporating BRL stablecoins into their financial operations. For example, real-pegged stablecoins are being used to facilitate international payments, such as paying suppliers or employees abroad. These funds are then converted into local currency through PIX or vice versa. Inbound use cases are also emerging, where companies receive payments in dollars and convert them into BRL stablecoins for local settlement.

In the payment side, most players in Brazil target B2B applications. They typically partner directly with businesses to integrate stablecoins into operational workflows. In a sense, the BRL1 consortium can work as an example. It was created to address the need for efficient cross-exchange settlements.

In traditional payment ecosystems, there are several BaaS and PaaS companies like Stripe or local payment service providers (PSPs) managing essential elements such as compliance, banking integration, and scalability for their clients. Even though in the blockchain space, many of these problems are solved by default, there are still, for instance, many problems with fragmentation among different blockchains and integrations with merchants.

Players in this segment often achieve growth by specializing in niches, such as institutional crypto platforms (ICPs) or remittance corridors. Early examples include Belo, Kravata and ElDorado. These niches create room for a variety of businesses to thrive within the same category.

Competitive advantage in this space is expected to come primarily from transaction volume, making early market entry a significant edge. However, strong technology, robust partnerships, and reliable payment rails also play important roles in long-term success.

One key lesson from early adopters is that simplifying integration—through APIs or SDKs—and offering compliance support can accelerate adoption. This approach helps distribute the effort of reaching end users, which is particularly valuable in emerging markets.

Stablecoin Issuance

The stablecoin issuer landscape in Brazil remains fragmented and at an early stage of development. While some players, like Transfero—the issuer of BRZ—have been active for over a decade, the winners are far from being defined. The market is still searching for a clear leader.

“Stablecoins have become a common topic in crypto discussions. Many entrepreneurs are building in this space, given the impressive results stablecoin issuers are demonstrating. In Brazil, the market didn't took off yet, we are just beginning to move from the speculative phase toward tokenization and the tokenized web. So we're still far from having a clear winner.”

— Fabrício Tota, New Business Development SVP at MB

According to our data, approximately R$XX million in BRL stablecoins are currently in circulation, with supply split among issuers. Although BRZ and BRLA lead in terms of holding addresses and transaction volumes, this has not yet translated into definitive market leadership (this is still a tiny fraction of what the TradFi system processes).

Beyond supply and transaction metrics, other factors are important for assessing the maturity of a stablecoin ecosystem. Among them are the mechanisms backing the stablecoin's value and the degree of transparency in its operations. Most fiat-backed stablecoin issuers in Brazil adhere to reasonable transparency standards, including proof of reserves and open protocol infrastructure. However, some issuers still fall short in these areas.

“Innovation on stablecoins should not come from the collateral, it needs to be "boring". Fiat-backed stablecoins present the most stable and efficient option for the asset class. In this sense, the focus must be on innovating in the application layer and on how stablecoins are used to create new or better financial products.”

— Leandro Noel, Founder at Avenia

Looking ahead, several factors are likely to accelerate the growth of BRL stablecoins. Among them, tokenization stands out as a key opportunity beyond use cases like FX and remittances. Brazil's tokenization ecosystem is growing, but to unlock its full potential, the presence of robust BRL stablecoins is essential. Many projects currently rely on fiat representation —assets similar to stablecoins but restricted to closed environments. A broader use of local stablecoins in money markets coupled with other financial primitives could reduce the need to custody client assets in banks and enable more seamless on-chain settlements across protocols.

Today, stablecoin issuers in Brazil often take on multiple roles within the value chain. Over time, a significant portion of their revenue may come from the yield on government bond reserves, as seen with USD-pegged stablecoins. However, there is an important distinction: dollar-backed stablecoins benefit from strong demand for holding, driven by the dollar’s role as a store of value and hedge. In contrast, local stablecoins pegged to the Real lack this strong holding incentive and are therefore more likely to serve primarily transactional purposes—at least while circulating supply remains low.

In the long term, the BRL stablecoin market is expected to exhibit a “winner-takes-most” dynamic. Too many competing issuers can fragment liquidity, which poses challenges for building an economy running on stablecoin rails. Even so, room will likely remain for specialized players in niches such as yield-bearing stablecoins or banks offering deep liquidity for high-value transactions.

Liquidity Providers & Market Depth

Liquidity is a fundamental element of the stablecoin value chain. It determines how easily users can buy, sell, or convert stablecoins at stable prices. In the case of BRL stablecoins, liquidity remains shallow, which limits their practical use for large transactions or payments. This is a major bottleneck for broader adoption and utility beyond the current niche use cases. Fragmentation among issuers only makes the problem worse, as it spreads limited liquidity across multiple tokens and platforms.

This issue is particularly pressing given that the most prominent use case so far has been foreign exchange (FX). Current data shows that decentralized finance (DeFi) pools containing BRL stablecoins are still modest in size. Collectively, these pools hold only around $XXX thousand in total value locked (TVL). The most significant of them is the BRL-sDAI pool on Balancer, which was launched to support Gnosis Pay operations for Brazilian users.

Despite this challenge, there are promising paths forward. DeFi offers clear opportunities, supported by transparent and accessible data. But there is also potential in off-chain venues such as over-the-counter (OTC) markets and infrastructure providers. One example is Kravata, an Iporanga Ventures portfolio company. Kravata enables on- and off-ramping through APIs and SDKs, operating across various regions and use cases. In this domain, the key success factors include liquidity efficiency, consumer trust, currency pair coverage, and presence in relevant markets. This segment is essential for enabling many Web3 and fintech operations, particularly for orchestrators and long-tail players.

“Liquidity will grow when both retail users and institutions across LATAM can access it without friction. Our goal is to expose stablecoin rails through plug-and-play APIs and SDKs, allowing applications to lower cross-border payment costs, exporters to settle instantly, and corporate treasuries to earn yield—while AI helps balance books, minimize slippage, and automate compliance.”

— Felipe Montes, CEO at Kravata

Another promising trend is the rise of peer-to-peer (P2P) liquidity providers like ElDorado, which are beginning to gain traction in Brazil. These platforms benefit from a leaner operating model, as they function as intermediaries and often do not fall under strict financial regulations. In Brazil, the use of PIX gives them an additional advantage: seamless integration with the local financial system, without the need to connect with multiple banks or payment providers. PIX acts as an instant and universal payment layer.

“A marketplace with P2P Pix <> USDT vendors is essential, as it fosters competition among vendors to offer the best exchange rates. Since Pix transactions are settled in real time, El Dorado’s escrow system can instantly net balances with users requesting USDT. On average, the entire on/off-ramp process takes less than three minutes.

Additionally, a P2P market enhances Pix’s interoperability—instantly connecting it with other payment methods such as PayPal, Zelle, MercadoPago, and many more.”

— Guillermo Goncalvez Espiga, CEO at El Dorado

Building deeper liquidity is essential for the growth of BRL stablecoins. One strategy is aggregation—linking order books and liquidity across centralized exchanges, OTC desks, and decentralized platforms to improve price execution. Another is incentivizing market-makers through revenue-sharing models or yield participation, encouraging them to trade and support stablecoin markets.

Finally, as real-world applications such as payments and remittances gain momentum, organic demand can help deepen liquidity over time. Brazil’s leading crypto exchanges and fintechs could support this growth by broadly adopting and integrating a specific BRL stablecoin. If one token achieves sufficient volume and liquidity, it could become a core asset for on-chain commerce and finance—unlocking seamless BRL-USD conversions and enabling more efficient financial services infrastructure.

Custody

Among the various components of Brazil’s stablecoin ecosystem, custody stands out as one of the more developed areas. Established infrastructure providers like Fireblocks already operate in the country, offering secure, enterprise-grade solutions for institutions that choose to manage custody of their clients’ digital assets directly.

At the same time, there is a important part of the ecosystem that is building around one of the crypto Ethos, self-custody. New players such as Picnic and Chainless are introducing self-custodial solutions that leverage innovative technologies like multi-party computation (MPC) wallets and account abstraction. These tools aim to make self-custody both safer and more user-friendly, empowering individuals and businesses to manage assets without relying on intermediaries.

However, this direction may clash with regulatory preferences. Brazilian authorities have shown a tendency to favor oversight and control, raising concerns among crypto-native stakeholders. A recent public consultation even proposed the possibility of banning self-custody of crypto assets entirely. If implemented, this would require that all transactions pass through licensed custodians.

Such a policy could have significant implications for stablecoins. On one hand, it might help mitigate risks related to illicit activity. On the other, it would undermine the permissionless, peer-to-peer nature that gives stablecoins much of their appeal and utility. Forcing transactions into centralized channels could limit innovation and exclude certain user groups, especially those seeking open access to financial tools.

The proposal has sparked strong opposition from many industry participants, who argue that banning self-custody would be counterproductive. Critics warn that such measures could stifle local innovation and push users toward offshore or less transparent alternatives.

The outcome of this regulatory debate remains uncertain. However, it will play a critical role in shaping the future of Brazil’s stablecoin market—particularly around how users hold and transact with digital assets.

Orchestration & Interoperability

As multiple blockchains, currencies, and payment networks emerge, orchestration refers to the infrastructure that connects these fragmented systems in a seamless and efficient way. In the stablecoin context, orchestrators can abstract the complexity of using digital assets across different chains, exchanges, and applications. This is especially relevant in Brazil’s growing ecosystem, where users should not have to worry whether their stablecoin is on EVM chains or Tron—or whether liquidity resides on different platforms.

Signs of fragmentation are already visible. For example, the BRZ token is issued on several blockchains—including Ethereum, Solana, Arbitrum, and Base—to reach users wherever they are active. At the same time, some BRL-pegged stablecoins exist both on centralized exchanges and in DeFi liquidity pools. Without orchestration tools, users and merchants must manually navigate multiple platforms to find optimal conversion paths or payment routes.

In Brazil, dedicated orchestration solutions are still limited, but the need for them is growing. As settlement becomes a commoditized service, competitive advantage is shifting toward liquidity access and system connectivity. The real opportunity lies in who can most effectively link the various components—exchanges, wallets, blockchains, and fiat rails—into a smooth and unified user experience. This will likely involve cross-chain bridges, liquidity aggregators, and interoperability standards.

Cross-chain infrastructure, including native multi-chain issuances, is already enabling stablecoins to move between ecosystems. The emerging architecture is likely to remain multi-chain but become more specialized. For example, some blockchains have a permissionless arrangement, allowing for everyone to build in an architecture where all operations can happen on the same layer, facilitating scalability and high throughput, such as Solana and Sui. Others such as Tether Chain or Circle Chain specialize in their own assets and create permissioned ecosystems for people and businesses to transact on. Orchestrators will be responsible for routing user activity to the most suitable destination based on speed, cost, or utility.

“If settlement is being abstracted, the true competition shifts to liquidity, buildability and distribution. Stablecoin success isn’t just about transaction volume; it’s about connectivity, creating ecosystems — how effortlessly liquidity can flow across network participants, yield products (DeFi protocols), blockchains, and use cases.

Networks that master liquidity orchestration—through composable decentralized applications (dApps), secure bridges, and deep DeFi integration—will come out on top. Ethereum’s dense ecosystem makes it a liquidity powerhouse, but Solana’s speed and low fees are narrowing the gap - being reflected in recent on-chain volume and revenue metrics. Here’s the twist: the network’s relevance lies in making liquidity feel borderless, not in monopolizing it. ”

— Antonio Neto, Growth Lead LATAM at Solana Foundation

In practice, Brazilian users should not need to understand or manage the technical details of the networks they interact with. A smart orchestration layer could handle this complexity—automatically selecting the best route, performing any necessary swaps, and managing compliance processes in the background.

This creates a significant opportunity for innovators to build what could become the “Visa” of stablecoin networks—an overlay that connects banks, wallets, exchanges, and blockchains to enable seamless value transfers. While some global projects are already pursuing this goal, Brazilian startups could either integrate these tools or develop region-specific alternatives, especially focused on Latin American payment corridors. Local payment fintechs, which already specialize in integrating diverse domestic methods, may be well-positioned to expand into stablecoin infrastructure.

As stablecoin volumes rise, the role of middleware and orchestration layers will become central. The global trend already shows a shift away from basic services like merchant acquiring or simple liquidity provision, toward higher-value offerings such as custody, orchestration and even treasury management. Brazil is likely to follow a similar path—with consolidation around a few stablecoin providers and a growing need to tie together fragmented services into a cohesive and efficient network.

Consumer & Merchant Applications

This component focuses on the consumer-facing layer of the stablecoin ecosystem—wallets, applications, and real-world use cases among both individuals and merchants. In Brazil, consumer adoption of stablecoins has primarily been driven by investment and savings needs, rather than everyday purchases. According to the 2024 LATAM Crypto Adoption Report by Chainalysis, stablecoin transactions represent 70% of the indirect flows from Brazilian exchanges to global platforms—highlighting their role as vehicles for capital protection and financial access.

On the savings front, both individuals and businesses are increasingly using stablecoins as a hedge against currency volatility. By converting a portion of their holdings into digital dollars, users can effectively dollarize their assets with minimal friction. This trend is already evident: some small and medium-sized enterprises (SMEs) in Brazil are turning to local stablecoin providers to protect cash flow from depreciation of the Brazilian Real. Additionally, crypto exchanges have reported billions in stablecoin trading volume, especially during periods of currency weakness.

Use cases are also expanding into the labor market. Gig workers and content creators in Brazil are now receiving payments in USDC or USDT, which they can either hold or convert to BRL when needed. Fintech platforms are seizing this opportunity, offering tools to streamline this experience. Meanwhile, stablecoins are beginning to appear in mainstream applications. For example, Mercado Pago—one of Brazil’s most widely used digital wallets—has integrated a dollar-pegged stablecoin, allowing users to transact with digital USD within a familiar interface. This reduces the technical barrier for everyday users and nudges stablecoins closer to mainstream acceptance.

On the merchant side, there are emerging examples of stablecoins embedded in payment infrastructure. A notable case is CloudWalk, a Brazilian payments unicorn that launched its own blockchain and a real-pegged stablecoin (BRLC). The stablecoin is used for merchant rewards and transaction settlement on CloudWalk’s point-of-sale devices. While this is a closed-loop model, it demonstrates how stablecoins can reduce costs by bypassing traditional card networks and add value through integrated loyalty programs.

The end-user layer of the stablecoin value chain is clearly growing, supported by increasing awareness and experimentation from both startups and traditional players. Web2 entrepreneurs, in particular, are beginning to explore stablecoins as building blocks for financial products. Still, widespread adoption will depend on the development of a robust regulatory and technological framework that can support seamless, compliant, and secure usage at scale.