Stablecoins in Latin America: Risks and Regulations
Update: 2025-12-12
Description
The Bank of Mexico warns of stablecoin risks in Latin America, citing liquidity issues, market contagion, and regulatory gaps. They emphasize the need for international safeguards to prevent stablecoin failures from impacting broader financial markets. Despite potential benefits, Mexico plans to maintain a cautious distance from virtual assets due to their systemic risks. Meanwhile, Brazil and Argentina lead Latin America in crypto adoption, with Brazil accounting for nearly one-third of the regions crypto transactions between 2022 and 2025. Central banks in these countries are taking a more proactive approach to regulation, with Brazil finalizing rules for crypto companies and Argentina considering allowing traditional financial institutions to trade cryptocurrencies.
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