Stablecoin Conference · Jul 8 · 23 min

The Hidden Liquidity Layer Behind Every Non-USD Stablecoin

With Juan Diego Oliva

Key takeaways

Juan Diego Oliva says buying USDC in Mexico cost a two to 3% spread three years ago, against two to three basis points for institutional customers now.
Juan Diego Oliva expects local stablecoins to win on payments turnover rather than AUM, and says they will not win unless they adopt the payments stack.
With everybody able to issue a stablecoin, Juan Diego Oliva says tech is a commodity and defensibility comes from proprietary licenses and distribution.

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Summary

The head of a Latin American liquidity provider for non-USD stablecoins argues that payments volume and distribution, not technology, will decide which local stablecoins last.

Juan Diego Oliva, CEO of Capa, says the cost of getting into dollars on-chain in Mexico has fallen sharply. Buying USDC there three years ago meant a two to 3% spread, he says, while institutional customers now pay two to three basis points. Capa is one of the largest market makers for non-USD stablecoins in Latin America.

From P2P arbitrage to LP

Juan Diego Oliva got into crypto in college by arbitraging peso-to-USDT spreads on Binance P2P. Capa began as a consumer on/off ramp, then moved to B2B payments, then enterprise, then publicly listed companies doing cross-border payments.

Today Etherfuse, Codex and Mento Labs use Capa as an LP for their on-chain markets, for rebalancing and bank management, Oliva says. He adds that companies use its rails to earn institutional yield without going to a traditional broker.

“Now everybody can issue their own stablecoin, and that's good. But that basically means tech as a commodity. I can't go to a VC and raise a series a and just tell them, oh, yeah. We have the best technology. No. I need to tell them, I own the proprietary licenses and the distribution network for this to work out.”

Juan Diego Oliva

Payments, not AUM

Juan Diego Oliva does not expect local stablecoins to become trillion-dollar AUM products, but to carry a lot of volume turnover. He puts the mean B2B payment ticket in Mexico at $110 and consumer remittances at 350. About 95% of Capa's local stablecoin payments leave it owning the currency risk before it finds a liquid way into dollars. Through spot rate agreements with Bitso, Minteo and BRL1, he says it sets itself three to five basis points when swapping into USDC.

Limits of scale

Once companies move $40M a day, Juan Diego Oliva says, no single provider can cover the book, so they build their own FX back offices. Capa has hit the same wall: too big for some Mexican payment providers, too small for larger ones. Some markets are harder still, and he notes the Dominican Republic has no market mid-rate.

Consolidation ahead

Juan Diego Oliva says more stablecoin companies were founded in the last six months than in the prior five years, and he expects a contraction to the top two to three issuers in big jurisdictions. He predicts that within a year firms like Corpay, Pepperstone or ICE will trade G20 currencies on the blockchain.

Juan Diego Oliva treats Latin America as separate markets, not one region. He says Capa will not be the best company in Argentina, but could lead in Mexico and the Dominican Republic and take a small share in Brazil, using licenses and distribution as its edge.

Capa, Binance, Bitso, and Braille come up most.

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