Fintech and stablecoin companies ought to contemplate trying outdoors of the US-to-Mexico hall to win the $174 billion Latin America remittance market, in line with a Bybit govt.
Most companies have centered too narrowly on the $61.8 billion US-Mexico remittance market and are lacking faster-growing corridors between the US and Central America, in addition to remittances inside Latin America, Bybit Chief Advertising and marketing Officer Claudia Wang said in a put up on X on Sunday.
“The corridors that look ‘sizzling’ proper now are usually not the corridors most fintechs are optimized for,” she mentioned, citing Venezuela-to-Colombia, Argentina-to-Bolivia and Spain-to-Ecuador as examples. The non-US-to-Mexico remittance market stands at about $112 billion.
“Cease treating LATAM as one market,” Wang mentioned, including that she spent six months finding out the area:
“Brazil, Mexico, Argentina, Colombia — every wants totally different licenses, totally different rails, totally different stablecoins, totally different advertising and marketing. The businesses successful right here run country-specific stacks, not regional ones.”
Remittances all through the Americas have largely been facilitated by banking rails by companies equivalent to Western Union and MoneyGram. Nevertheless, each unveiled plans to roll out stablecoin infrastructure following the passage of the GENIUS Act in July.
Western Union is constructing its personal US dollar-backed stablecoin, USDPT, which is within the last levels of readiness and anticipated to launch this month.
Crypto-native corporations equivalent to Binance, Bitso, Strike and Felix Pago are additionally competing within the LATAM remittance market, as are banks and retail and telecommunications corporations equivalent to Walmart and Tigo, Wang famous.
US immigration coverage is influencing LATAM remittance market
Wang famous that the US-to-Central America hall “is exploding,” with remittances in Honduras, El Salvador and Guatemala rising 19%, 18% and 15%, respectively, in 2025.
Against this, remittances within the oversaturated US-Mexico hall fell 4.5% to $61.8 billion.
Wang mentioned the divergence between rising Central American flows and Mexico’s decline is the results of US immigration coverage: “Migrants from Central America are sending extra dwelling — sooner, bigger quantities — to hedge towards deportation danger.”
Against this, Mexico has a “extra established and documented diaspora” and thus “would not present the identical panic-send habits,” Wang mentioned.
As for the non-US corridors, Wang famous that whereas a few of these remittance markets are small in absolute phrases, they’re “barely served” by US cash transmitter operators and “virtually untouched by crypto rails.”
Latin People wish to maintain stablecoins, not simply transfer them
Wang additionally mentioned many Western fintechs haven’t realized that in LATAM, the “killer app” is holding stablecoins, not transferring them.
“Customers do not wish to ‘use’ stablecoins for a transaction and convert again to native foreign money. They wish to maintain {dollars}. The transaction is the aspect impact.”
Wang mentioned there is no such thing as a clear winner within the LATAM remittance market, including that “the fintechs that win the following decade on this area will mix native rails, stablecoin liquidity, belief and closed-loop economics — remit → maintain → spend → earn.”
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She added that many fintech corporations within the area have constructed their merchandise for the everyday 25-year-old crypto dealer, not the typical remittance sender, who’s 40 to 60 years outdated and presumably will not be tech-savvy.
“In case your product makes a 50-year-old manufacturing unit employee in New Jersey suppose for greater than 30 seconds earlier than sending $300 to his mother in Honduras, you’ve got already misplaced,” Wang mentioned:
“The crypto trade has spent 5 years optimizing for the mistaken person. The retail remittance buyer in LATAM would not wish to ‘self-custody.’ They wish to know the cash landed.”
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