Stablecoin Jan 2025 Update

Stablecoin Market Map Highlight: ElDorado (P2P) & Shield (B2B)

Continuing the theme of stablecoins gaining mainstream momentum from our last stablecoin update, we’re excited to highlight two LATAM focused stablecoin players—El Dorado and Shield. We decided to highlight them because both companies focus on solving real pain points when it comes to money transmission while abstracting the most complex parts of crypto away from the users. More importantly, they showcase how crypto:

• Is becoming increasingly relevant and adopted by mainstream users
• Allows for interoperability that has never been possible before with legacy payments systems
• Is simply faster and cheaper for payments both in consumer and business settings and providing real-world utility (not all crypto activity is memecoin mania!)

El Dorado

El Dorado is a consumer based payment app available in Argentina, Bolivia, Brazil, Colombia, Panama, Peru, and Venezuela. In a nutshell, users can download an iOS or Android app to:

• send crypto to other users or wallet addresses
• buy and sell crypto from a P2P marketplace (by placing or responding to an ad)

Because Latin American consumers rely on disparate apps (PayPal, Zelle, MercadoPago, Pix, Nequi, Wise to name a few) for their day-to-day lives, El Dorado, through stablecoins (and other tokens) can transfer funds between apps that don’t have native support for interoperability.

For example, a graphic designer in Venezuela who freelances for an American company gets paid via PayPal in USD. However, there are two issues:

• PayPal doesn’t allow her to convert her USD to Venezuelan Bolivar (VED) to pay for her groceries and rent
• PayPal’s USD exists in a walled garden and isn’t interoperable with all the different mobile apps she uses

So she connects PayPal to El Dorado and uses El Dorado to buy USDT using El Dorado’s P2P Marketplace. Now, with USDT, she can take her money and spend it wherever she wants to. For example:

• She uses El Dorado again to convert her USDT to Venezuelan Bolivars so she can pay rent or buy groceries
• She uses Zinli (https://www.zinli.com/) to buy gift cards using her USDT so she can go shopping on online platforms like Alibaba or Temu (that doesn’t accept VED or USDT)

Here is a live demo of how to swap Brazilian Real to USDT using the El Dorado app: https://www.youtube.com/watch?v=UNKjtEd48Yc

Finally, I had the pleasure to meet El Dorado’s Co-founder and CMO, Alessandro Cecere last week, and he mentioned several fascinating anecdotes:

• El Dorado has had over 600,000 downloads to date
• 99.4% of stablecoin volume is USDT (almost no demand for USDC)
• The demand to move dollars out of PayPal is so great that people are willing to pay up to 17% (this includes PayPal’s 5.4% + $0.3 fees for payments between PayPal users to move funds from PayPal to USDT
• One 20 year old quit his job and works full time as a market maker on El Dorado’s P2P Marketplace and makes over US$1000 per month

Shield

Shield, founded by MIT graduate Isaiah Udotong and Princeton graduates Emmanuel Udotong & Luis Carchi, demonstrates how stablecoins are upending B2B cross-border payments. After spending significant time in Argentina, Ecuador, and Colombia, the team observed that many Latin American users are already familiar with USDT and the Tron network out of necessity as these users live in countries with high inflation and use crypto as a way to escape currency devaluation.

Shield leverages this existing familiarity with stablecoins and offers a compliant B2B payment platform that combines the efficiency of stablecoins with rigorous KYC and KYB processes. This approach has allowed them to earn trust from businesses that might otherwise be hesitant to engage with crypto-based solutions.

Uses cases: Shield has become a crucial facilitator for US-LATAM trade flows. For example, some of their customers include local importers who are buying US agricultural products and selling to the LATAM markets. What sets Shield apart is they meet their customers where they’re at. Their US users prefer to receive funds in their banks, while LATAM users prefer to use USDT. Shield therefore allows the importer in LATAM to pay for the products using USDT, and on the other end, the American suppliers would receive USD (not crypto) in their banks. Shield handles all the complexities in-between.

Another example of a customer are LATAM importers sourcing goods from Asia (e.g. Hong Kong). Shield’s key advantage is allowing same-day settlement, compared to the traditional 2-3 business day wait time for international wire transfers. This often allows buyers to get their inventory faster and reduces inventory risk.

Most interestingly, USDT on the Tron network dominates with 70% of transaction volume on Shield, followed by USDC on Ethereum, and a small but growing portion on Solana. This distribution reflects both user preferences and the practical considerations of transaction costs, as Tron's low fees make it particularly attractive. This is similar to the findings in Artemis’s stablecoin report with Visa and Castle Island Ventures that USDT and Tron are highly preferred in emerging markets.

January Data Spotlight: Growth Growth Growth

• Stablecoin balances across wallets for 13 chains Artemis tracks has been up-only in almost all amount bands, suggesting usages by a wider varieties of users across all income levels.

• Tether (USDT) continues to dominate stablecoin adoption, driven in particular by CEX support

• But Circle (USDC), traditionally favored by DEXes, is beginning to make gains with CEXes with its recent partnership with Binance

GENIUS vs. STABLE: Key Differences of the next chapter in U.S. Stablecoin Regulation

The U.S. Congress is finally moving toward clear regulation for stablecoins with two major legislative efforts:

• the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) in the Senate
• the STABLE Act of 2025 in the House

Both bills aim to create a comprehensive framework for dollar-backed stablecoins, ensuring they are fully reserved, transparent, and integrated into the financial system while mitigating risks like illicit finance and systemic instability. The overarching goal is to provide regulatory clarity that fosters innovation while safeguarding consumers, addressing a long-standing (and frustrating) gap in U.S. crypto policy.

GENIUS Act

The GENIUS Act takes a tiered regulatory approach—stablecoin issuers with under $10 billion in circulation can remain under state regulation, while larger issuers must transition to federal oversight under the OCC or Federal Reserve. The bill also:

• mandates 1:1 reserve backing exclusively in cash or short-term U.S. Treasuries
• bans algorithmic stablecoins
• requires monthly independent audits to ensure transparency

Additionally, it explicitly allows banks to issue stablecoins and hold reserves for issuers— this represents an enormous step forward as most banks have been hesitant to hold crypto assets (e.g., the now repealed SAB 121 required banks to record crypto holdings as liabilities).

STABLE Act

The STABLE Act takes a more centralized regulatory approach, placing nearly all stablecoin issuers under federal jurisdiction. This means the STABLE act likely ensures uniformity across all issuers and makes stablecoins simpler to regulate but at higher compliance costs to issuers, especially smaller and/or inexperienced issuers. The STABLE Act also introduces stronger consumer protection provisions, such as automatic redemption rights (requiring issuers to redeem stablecoins at face value within a set timeframe) and enhanced financial crime compliance measures. However, forcing all issuers into a federal regime could stifle innovation by placing smaller projects under the same regulatory burden as major financial institutions.