Paradigm’s LatAm stablecoin bet meets falling supply
Paradigm’s push into Latin American payments has arrived as the broader stablecoin market has been losing supply, sharpening the gap between venture capital conviction and the current state of token balances. Paradigm led a $9 million Series A round for El Dorado, a Latin American payments platform building on stablecoin-powered cross-border transfers, while McKinsey said true stablecoin payment volume reached about $390 billion in 2025, more than double 2024 levels, but still a small share of total on-chain activity and payment volume.[3][1]
Overview
- Paradigm led a $9 million Series A in El Dorado, signaling continued venture backing for stablecoin payment infrastructure in LatAm.[3]
- McKinsey estimates about $390 billion in true stablecoin payment volume in 2025, more than double 2024, but still a limited share of total payment activity.[1]
- Polygon said LATAM corridors can carry 2%-7% traditional transfer costs and 2-5 day settlement times, which explains why payment firms keep testing stablecoins.[2]
- McKinsey warned that raw reported stablecoin volumes should be treated as a starting point, not a proxy for revenue-generating payment adoption.[1]
- Bitso and Polygon both frame stablecoins as most useful for cross-border settlement, not necessarily for consumer checkout, narrowing the near-term use case.[4][7]
- The main uncertainty is whether rising payment use can outpace broader supply declines without stronger regulatory clarity and deeper local on/off-ramp coverage.[5][1]
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Paradigm’s LatAm payments bet
Paradigm’s investment in El Dorado reflects continued interest in the Latin American payments corridor, where businesses have long faced high FX spreads, slow settlement and pre-funding requirements.[3][2] The bet is straightforward: stablecoins can cut friction in cross-border transfers, especially in markets where traditional banking rails remain costly and uneven.
That thesis has support in industry data. Polygon says traditional rails on key LatAm corridors can cost 2% to 7% of transaction value and settle in two to five days, while stablecoin-based rails can reduce end-to-end costs and remove the need for idle prefunding capital.[2] Bitso likewise says the business case is strongest where companies need faster settlement, more transparent costs and simpler automation across fragmented corridors.[7]
Stablecoin supply versus payment demand
The contradiction in the market narrative comes from supply trends. The user’s premise points to falling stablecoin supply, and the broader point is that token balances do not always move in lockstep with payment experimentation. McKinsey cautioned that raw stablecoin transaction volumes can overstate actual payment usage and should not be read as a direct proxy for commercial adoption.[1]
| Metric | Source | What it means |
|---|---|---|
| True stablecoin payment volume in 2025 | About $390 billion | Real usage is growing, but remains a subset of broader crypto activity.[1] |
| 2025 vs. 2024 growth | More than doubled | Payment use is expanding quickly from a smaller base.[1] |
| Traditional LatAm corridor costs | 2%-7% | Legacy rails still leave room for stablecoin savings.[2] |
| Traditional settlement time | 2-5 days | Speed remains a commercial advantage for crypto rails.[2] |
Interpretation based on available data: the market is seeing two different signals at once. Venture firms and payment operators are still funding corridor-specific stablecoin products, while aggregate supply trends suggest investors remain selective and liquidity is not expanding uniformly across the sector.[3][1]
Why LatAm keeps attracting capital
Latin America remains one of the clearest test beds for stablecoin payments because the underlying problem is operational, not ideological. Cross-border businesses care about speed, working-capital efficiency and FX cost, and those pressures are persistent in the region.[2][7]
McKinsey’s estimate that true payment volume reached roughly $390 billion in 2025 suggests the use case is becoming more than a niche experiment.[1] Still, the same report says stablecoins’ share of total on-chain activity and total payment volume remains relatively small, which tempers claims that the category has already become mainstream.[1]
| LatAm payments issue | Traditional rail | Stablecoin rail | Implication |
|---|---|---|---|
| Cost | 2%-7% of transaction value | Lower end-to-end cost potential | Better unit economics for cross-border operators.[2] |
| Settlement | 2-5 days | Near real-time movement of value | Less working-capital drag.[2][7] |
| Prefunding | Often required | Reduced or eliminated in some models | Frees trapped capital.[2] |
Market relevance and downside risks
For investors, Paradigm’s backing of El Dorado shows that stablecoin infrastructure is still drawing capital where there is a concrete payments problem and a visible path to monetization.[3] For the market, the issue is whether those corridor-specific wins can scale fast enough to offset broader supply softness and keep payment activity from remaining fragmented across isolated use cases.[1]
One downside scenario is that stablecoin adoption in LatAm stays concentrated in business-to-business settlement and never broadens enough to drive large, persistent balance-sheet growth.[1][7] Another risk is regulatory friction. Bitso said successful deployment depends on clear compliance, licensing coverage and audit-ready reporting, while the need for compliant on- and off-ramp partners remains a practical constraint in each target country.[5]
The key uncertainty is whether rising transaction use translates into sticky supply and deeper liquidity. McKinsey’s warning about raw volume data is important here: payment activity can rise even when token balances do not, especially if users treat stablecoins as a transit layer rather than a store of value.[1] That leaves Paradigm’s LatAm bet looking less like a broad market call and more like a targeted wager that specific corridors can still produce durable demand even as the wider stablecoin supply picture remains mixed.
- https://www.mckinsey.com/industries/financial-services/our-insights/stablecoins-in-payments-what-the-raw-transaction-numbers-miss
- https://polygon.technology/blog/latam-corridor-economics-why-enterprises-are-betting-on-stablecoins-for-cross-border-payments
- https://www.mexc.com/news/1147568
- https://polygon.technology/learn/payment/solving-latam-payments-how-stablecoins-overcome-volatility-and-boost-inclusion
- https://business.bitso.com/en/blog/whats-next-for-stablecoins-what-we-learned-at-the-mexico-city-2025-conference
- https://business.bitso.com/en/blog/stablecoins-business-payments-latam-executive-guide
- https://www.inswitch.com/blog/stablecoins-and-the-future-of-cross-border-payments-in-latam-a-practical-guide-for-businesses
