AI, Stablecoins, and Regulations Shift Latin American Finance

Stablecoins, artificial intelligence (AI), and evolving regulatory frameworks are reshaping Latin America’s financial services landscape, particularly in how remittances are used, according to Alejandro del Río, Regional Director for Latin America, Paymentology.

Del Río highlighted a major shift in remittance usage. Beyond sending money, consumers are now leveraging stablecoins for savings and spending and cross-border spending. “It is not just about receiving funds anymore. It is about how you use them to spend, to save, even to access a dollar account in countries where that was not possible before,” he said.

He pointed to companies such as DollarApp, Rain, and ViaCarte, which enable users in Mexico, Colombia, Argentina, and Brazil to hold dollar accounts funded via stablecoins. This model significantly reduces transaction costs compared to traditional channels, where fees can reach up to 30%. “When you provide low-cost digital alternatives, people do not just withdraw cash. They start using their cards, saving, and building a stronger relationship with the financial system,” Del Río explained.

A central theme, he noted, is the emergence of super app–style solutions that integrate multiple financial products into one ecosystem. “Through our processor, we can serve debit and credit clients, those with investments, crypto, or stablecoins, and reconcile them in one application,” Del Río said. The platform, he added, would allow payments through virtual or physical cards while automatically detecting the relevant currency—pesos, reais, or dollars—depending on location.

With remittance flows to Mexico surpassing US$60 billion annually, new regulations and potential fees have become a growing concern. However, Del Río argued that digital transfers remain significantly cheaper than traditional methods. “If sending US$100 costs US$7 through traditional channels, and US$8 with a new tax included, it is still a US$22 savings compared to past costs,” he said. The challenge, he added, will be determining how these costs are distributed along the remittance chain.

He also underscored the rise of stablecoins and crypto-based transfers, calling them both an opportunity and a challenge for banks. “The issue is how to turn stablecoins into real money easily. That is where banks and technology companies need to step in,” Del Río said. For Paymentology, the focus is on enabling technology that reconciles assets without holding custody.

While AI dominates industry discussions, Del Río stressed its practical applications, particularly in fraud prevention. “We have been using AI for a long time to analyze consumer habits. When spending patterns shift, the system triggers alerts to prevent fraud,” he noted.

He also emphasized that fintech growth must be underpinned by strong compliance frameworks. As a processor, Paymentology does not hold customer funds and requires clients to have principal licenses with Visa or Mastercard. “We are extremely strict on compliance. If we see risks in onboarding or connections to restricted jurisdictions, we walk away,” he said.

Looking ahead, Del Río warned that governments like the United States may soon impose taxes on digital cross-border transfers. Still, he argued, the broader trend points to greater financial inclusion. “There is a window of opportunity before regulation fully sets in, but the direction is clear: these tools are expanding access to the financial system,” he concluded.