Author: Danny
A while ago, I went to Mexico and was fortunate enough to meet a Cantonese restaurant owner in Mexico during a meal.
The owner, surnamed Huang, has ancestors from Taishan. He took me to his restaurant, which wasn't large, about 80-100 square meters, located in a lively neighborhood. The shop displayed statues of Guan Yu and the God of Wealth, along with a faded photo of his old hometown in Guangdong—a watchtower, a banyan tree, a pond, a narrow village road. His Mandarin wasn't very standard, his Spanish was fluent, and he only remembered a few family phrases in Taishanese.
When talking about how his ancestors sent money back to mainland China, he only recalled an uncle coming to the shop, his old father handing over a letter bag to the uncle, and saying, "Send it back."
These three words opened the centuries-long history of Latin American money houses.
To truly understand what stablecoins are in Latin America, you must not start with the narrative of crypto adoption. That's the language the crypto industry uses to dazzle Wall Street. Crypto asks, "Where has adopted me?"
In places where cash flow depends on regular remittances from overseas relatives, the important thing isn't crypto. It's: the money must go home.
I. What the Taishan People Understood First Wasn't Finance, It Was Hometown
The Taishan people understood long ago that money travels a long road. Villages west of the Pearl River Delta saw generations take ships to "Gold Mountain"—to Cuba, Peru, Panama, Mexico. Many landed first on the US West Coast. Later, with the Chinese Exclusion Act, relaxed borders, and chasing work wherever it was found, they entered northern Mexico. Mexicali, Tijuana, Sonora, Mexico City—all have traces of Cantonese people.
They brought with them strength, a trade, a few relatives, a letter of introduction. In northern Mexico, there were railway builders, cotton farmers, grocery store owners, and restaurant owners. Later came the "café de chinos," and homes where Cantonese, Taishanese, and Spanish mixed. A child's official name might be José Wong, his family elders call him Ah Wah, he speaks Spanish at school, hears Taishanese at home, worships ancestors during the New Year, goes to church on weekends, grows up to take over a restaurant or open a small import company. This isn't a romantic story. It's about survival.
Immigrants have an inescapable knot in their lives: being abroad, yet all responsibilities lie in the old hometown. Parents need support, younger siblings need education, the ancestral house needs repairs, the clan needs donations, weddings and funerals require contributions. So, the money must cross the ocean.
But back then, there were no apps, no SWIFT, no Alipay, not even Western Union outlets. Thus, the "Silver Letter" was born. (aka "Qiao Pi," Cantonese call it Silver Letter)
The Silver Letter wasn't an ordinary family letter. It was half letter, half money; half greetings, half ledger; half concern, half settlement. The letter asked: Is mother well? How is the harvest? Is younger brother enrolled? Send a reply when the money is received. The money attached to the letter might be months of wages or an entire year's savings scraped from meager living. Today we call stablecoins "money with a message"—but the Silver Letter was already "money with a message," only back then the message was written on paper, the money carried by human flesh, and trust relied on the guarantee of fellow villagers.
Some might say the Silver Letter ultimately relied on just two words: "trust." That's too simplistic. It didn't rely on some abstract trust, but on an executable mechanism that worked within a closed society. Who you were, who your father was, which village you were from, which street in Mexico City your shop was on, which association you were related to—if you dared to embezzle the money, it wasn't just a customer complaint. The entire village would know you were untrustworthy. Your business, your relatives, your surname, your position in the association—everything would be implicated.
This is the core of the Silver Letter: it wasn't compliant, yet it had enforceability (aka somewhat like a CEX); it wasn't a bank, yet it had credit constraints; it was not decentralized at all, but within the familiar society, it was absolutely reliable. It solved not just "can the money move," but the harder thing—how a person far from home could make those back home acknowledge that the money had arrived.
II. Latin America Has Always Been a Silver Letter Continent
Zoom out from the Chinese community to the whole of Latin America, and you'll find the Silver Letter isn't unique to the Chinese. It's the norm, just called by different names. Mexicans, Salvadorans, Hondurans call it "remesa"; Venezuelans don't bother with a name, they just need that overseas relative's money to become medicine, rice, cash; Argentines call it dollar income, freelance payment, dólar crypto, USDT, or simply, "don't give me pesos"; Chinese call it Silver Letter. The names vary wildly, but the essence is the same: one person sweats here, another lives there; money earned in one monetary system must pass through another to land as money that can buy food, pay tuition, get medicine, cover rent.
This is the oldest, most primitive demand for cross-border payments. Fintech didn't create it; it took fintech a century to catch up to it.
How big is this market? In 2025, total remittances received by Latin America and the Caribbean were about $173.7 billion; Mexico alone received $64.7 billion in 2024, almost all electronic, the vast majority from the US; by 2025, Mexico's number dropped somewhat, but still over sixty billion. This isn't fringe capital. This is the payroll for millions of families, the fiscal transfer for many small towns, the lifeline of foreign exchange for several countries.
That's why Latin America understood stablecoins earlier than many developed countries, not because they love blockchain or believe it changes the world. It's because the pain of "money stuck between two worlds" is all too familiar to them.
III. Remittance Isn't Payment; It's the Cash Flow for a Distant Family
The payment world talks endlessly about rails—card networks are rails, bank transfers are rails, Pix, SPEI, UPI are rails, blockchain is also a rail. But immigrants and migrant workers don't talk about rails. They only ask one thing: Has the money arrived?
Sent today, when does it arrive? Send $100, how much does the other side actually get? Can it arrive on the weekend? Are there queues? Will the exchange rate slash me? If something goes wrong, who do I contact?
This is where remittance differs most from ordinary payment. Ordinary payment is buying something; remittance is sustaining life. You buy water at a convenience store, the card fails, you just use another card; a person sending money to their family in Mexico on Friday night—that money might be Monday's rent, a child's school uniform, an elderly mother's medicine. That kind of failure isn't a UX problem; it's a life problem.
So remittance companies have never sold just "transfer." They sell certainty: the money will definitely arrive, the amount is clear, the recipient knows where to collect it, someone answers the phone if there's a problem. Western Union, MoneyGram, Ria, various local cash points—they charge high fees and have survived for decades, feeding on the migrant families' rigid demand for the word "certain," not some technological edge. (In comparison, crypto's C2C is like: haha)
For stablecoins to squeeze into this market, shouting "I'm cheap on-chain" isn't enough. Cheapness is just the entry ticket. The real test is: Can you turn that cheapness into money the recipient can see, touch, and withdraw within N days? A Mexican family doesn't want USDT; they want pesos. A Brazilian landlord doesn't want a chain hash; they want the notification sound of a Pix deposit. A Venezuelan grandmother doesn't want the Tron network; she wants something she can exchange for medicine. The relative back in Guangdong doesn't care about USDC's reserve structure at all; they just want to know one thing: Has the money arrived?
What the chain can solve is only the middle segment.
IV. Stablecoins Aren't Crypto Adoption; They're Remittance Infrastructure
Many reports claim Latin America has high stablecoin adoption. This conclusion is only half right. What's truly happening isn't "Latin America adopted stablecoins," but that Latin America was already sitting on a mountain of cross-border capital needs, and stablecoins happened to patch the most painful segment.
Where is the pain? Banks are slow, expensive, weekdays only, have account requirements, ask many questions; traditional remittance companies are reliable, but their fee model is like a discount platform, taking a cut at every layer; cash networks are convenient but opaque; P2P is flexible but risky; foreign exchange controls split official and real rates into two; local currencies keep depreciating, no one wants to hold pesos a second longer.
In such places, USDT, USDC aren't understood as "crypto assets" at all. They are a form of dollar that can be put in a phone and carried around. Each country uses them differently.
Argentines buying USDT, 80% of the time, just want to dodge the next blow to the peso, putting money from overseas clients into a shell that more closely resembles a dollar—for many middle-class, freelancers, small business owners, it's a digital version of dollar cash.
Venezuela is another story. After local currency credibility was shattered by hyperinflation, dollarization grew on its own. But not everyone has a proper dollar account, not everyone dares to trust banks, so stablecoins became a layer of informal dollars: overseas relatives can send, locals can receive, vendors can quote with it, P2P can exchange it for local cash.
Colombia and Peru are in the middle, lacking Argentina's anxiety about full dollarization or Venezuela's rock-bottom collapse, but they have migrants, cross-border workers, platform economies, small import merchants. Stablecoins here flow through remittances, freelancer payouts, B2B settlements, and platform payouts.
Brazil is different again because it has Pix. Local small payments are fast, cheap, and convenient. Stablecoins can't tell a "faster" story on this line. In Brazil, they either move upstream—cross-border, forex, corporate settlements, imports, platform funds; or they move outward—connecting those who earn overseas and spend locally. In Brazil, stablecoins aren't a local payment revolution; they are a layer of cross-border dollars.
To put it bluntly, that's their position. It never rises to the level of blockchain revolutionizing the world.
South Americans often understand this faster than North Americans. North Americans discussing stablecoins love to start with regulation: what are the reserves, are short-term bonds held, does the issuer have a license, will it drain bank deposits, will it disrupt monetary policy. South Americans are different; they understand stablecoins through lived experience.
Actually, if you've ever experienced your national currency shrink overnight, you understand why ordinary people desperately want dollars; if you've experienced forex purchase restrictions, you understand why P2P markets are so hot; if you've sent money back home, you understand that 3%, 5%, 8% fees are not small change; if you've seen the official rate and the street rate are two different prices, you understand that "a truly exchangeable dollar price" is more precious than the central bank's posted rate.
Latin Americans' obsession with the dollar isn't taught in finance classes; it's a mental habit conditioned by repeated currency collapses.
V. Silver Letter, Money House, Stablecoin: Three Different Execution Mechanisms
The media loves to stuff Silver Letters, underground money houses, and stablecoins into the concept of "trust," and then declare, "The essence of finance is trust." This statement is incorrect.
Trust isn't a single thing. Moreover, the trust of the Silver Letter and the trust of stablecoins are almost opposites.
The Silver Letter relied on the punishment of a familiar society; its enforceability came from a web you couldn't escape—you couldn't escape, your relatives couldn't escape, your reputation, everything couldn't escape. It wasn't about trusting strangers; it was about not daring to betray acquaintances.
Underground money houses relied on capital pools in both locations plus ledger netting. The core wasn't each transaction actually crossing borders, but having pools on both ends and matching the books: someone in Mexico wants to exchange dollars or pesos for RMB, someone in China wants to exchange RMB for dollars or pesos. The intermediary doesn't need to transfer the money each time; they just need to offset the debts and credits on both sides.
Stablecoins rely on the finality of on-chain settlement. They don't care who the other party's father is, or if you're from the same village. If the address is correct, the network confirms, the asset can move, the value is transferred.
Same problem, three solutions: Silver Letter relies on people, money houses rely on accounts, stablecoins rely on chains. USDT resembles the Silver Letter because they both serve people far from home; USDT is unlike the Silver Letter because it strips out the crucial layer of personal relationships from the Silver Letter.
The Silver Letter forced you to be embedded in a network of relationships; stablecoins let you jump out of that network. This is their freedom, and also their risk.
VI. Underground Money Houses Are Not the Direct Descendants of the Silver Letter
Don't draw a clean lineage from the Silver Letter to today's underground money houses. The old Taishan Silver Letter system and today's cross-border gray money houses are less like father and son, and more like different kinds of scars growing from the same wound: places where finance is too slow, too expensive, too distant, too user-unfriendly, produce things that look alike—bypassing banks, relying on intermediaries, using informal ledgers, drilling through the cracks between two financial systems.
But the Silver Letter served the responsibility of the migrant towards their family; underground money houses serve more capital misallocation, forex controls, trade settlement, and regulatory friction. The starting point of the Silver Letter was sending money home; the starting point of money houses might also be sending money home, but it could also be foreign trade settlement, capital flight, or even laundering illicit funds. The moral color, era, source of funds, risk—they are not the same thing at all.
When stablecoins entered, things got more complicated. USDT doesn't automatically clean up underground money houses; it just makes that old ledger run faster. Past money houses relied on cash pools in two places, bank accounts, handwritten ledgers among acquaintances; today's money houses have on-chain wallets, P2P groups, exchange accounts, OTC networks, local payment accounts in their hands. Past ledgers were on paper; today part of the ledger is etched on-chain. But being visible on-chain doesn't mean the money is clean. Stablecoins let legitimate cross-border funds move faster, but they also let gray money catch the same fast train.
In the eyes of regulators, stablecoins aren't as simple as "young people playing with coins"—they could grow into a parallel forex system, an international payment channel bypassing bank scrutiny, a low-friction exit for swapping local currency for dollar assets.
VII. What Officials See Is Not Adoption, But Forex and Payments
The public looks at stablecoins for whether they preserve value, whether they arrive, whether they lose less on exchange rates. Officials look at a different ledger: Who issues them? Who custodies them? Who redeems them? Who does KYC? Who reports suspicious transactions? Who bears consumer protection? Who will handle large inflows/outflows? How to prevent them from becoming secret tunnels for tax evasion, money laundering, and bypassing forex controls? So, Latin American officials' stance on stablecoins isn't about being open or conservative; a more accurate description is—they saw long ago that this thing cannot be stopped, it can only be regulated.
Brazil is one of the clearest. The Brazilian Central Bank has placed the buying/selling of virtual assets pegged to fiat currency, as well as using virtual assets for international payments and transfers, entirely within the regulatory framework for forex operations. This is a watershed for the entire industry. In the past, stablecoin companies loved to portray themselves as technology platforms, wallets, infrastructure, settlement layers. But in a market like Brazil, if you're practically handling cross-border funds, dollar substitution, and local settlement, don't think you can stay outside financial regulation forever.
Mexico is another matter. It has a massive remittance volume and a banking transfer backbone like SPEI. In 2024, it received about $64.7 billion in remittances, over 96% from the US, over 99% electronic. This shows Mexico is far from the paper money era; it's thoroughly electronic. So the opportunity for stablecoins in Mexico was never "upgrading paper to electronic." It needs to tackle another hard nut: cost, speed, exchange rates, cash pickup, local bank accounts, immigrant status, US-side compliance, Mexico-side payout. The key is how to organically stitch these links together.
Argentina's regulators are more pragmatic. They know people are buying stablecoins, and they know dollarization won't disappear with a ban. Their challenge isn't "allowing people to want dollars," but how to fit exchanges, custody, VASPs, AML, and user protection into a manageable framework.
The public asks: How can my money get home faster? Officials ask: Will this money path eventually bypass me? And if it does, that's your mistake.
Neither side is asking the wrong question.
VIII. The Real Battlefield Isn't That On-Chain Moment; It's at Both Ends
The easiest place to overestimate stablecoins is to think "transfer complete" equals "payment complete." Far from it. The chain can prove that a sum of USDT moved from one address to another, but it can't prove the recipient isn't a scammer, guarantee the funds' clean origin, handle user typos in addresses, prevent local bank account freezes, or let a Mexican family use a wallet address to buy groceries at the supermarket.
Stablecoins only ever solve the middle segment. The hard part is both ends.
One end is where the money comes from: US salary, Mexican cash, Brazilian real, foreign trade income, platform payouts, freelancer invoices, salary from an overseas company.
The other end is where the money needs to go: Pix, SPEI, Mercado Pago, Nequi, Yape, bank account, cash pickup, supplier account, landlord account, family member's mobile wallet.
Stablecoins are sandwiched between these two ends, responsible for moving value faster, cheaper, and more continuously. But they don't educate users, apply for licenses themselves, build local bank relationships, cash networks, or customer service, and they certainly don't build trust.
So the ramp business will increasingly look like hard labor. When everyone can exchange USD for USDT, USDT for local currency, and on-chain costs keep falling, making money just on spreads and fees becomes harder and harder.
The money will flow to both ends: Whoever controls the sender side in the US gains customers; whoever controls the payout side in Mexico gains retention; whoever holds the Pix exit in Brazil gains speed; whoever has real dollar liquidity in Argentina gains pricing power; whoever has licenses and bank relationships can survive rounds of regulation; whoever has the brand makes a migrant dare to entrust an entire month's salary to them.
This is the real opportunity for stablecoins in this remittance story. Not issuing a coin, not making a crypto card, not getting the corner café to accept USDT.
What they should grow into is the next-generation remittance stack. The frontend is the language and scenario users are most familiar with—a Spanish app, a counter at a Chinese supermarket, a WeChat mini-program, a WhatsApp bot, or a local Mexican wallet.
In the middle, stablecoins quietly settle underneath. Users may not even know they used USDT or USDC, just like families in the old villages didn't know how the Gold Mountain House exchanged currency, netted accounts, and moved money across the Pacific.
The backend is local delivery—landing in Mexico via SPEI or cash, in Brazil via Pix, in China via bank or WeChat/Alipay, in Argentina via Mercado Pago or cash, in Colombia via Nequi, in Peru via Yape or Plin.
Users only see four words: The money arrived.
The platform sees: Settlement costs lowered, funds move faster, cross-border payouts become programmable.
Regulators see: Are you a remittance company, payment institution, forex dealer, VASP, or bank?
The answer is—I think you're all of the above.
