After my post about $DLO the topic arose that stablecoins would destroy dLocal's business.
Here are my thoughts on this:
Why stablecoins are relevant for DLocal
DLocal has established itself as the leading platform for cross-border payments in emerging markets. As stablecoins (cryptocurrencies pegged to fiat currencies such as the US dollar) are increasingly used for remittances and settlements, the question arises: Are they a threat or an opportunity for DLocal?
DLocal's current business model
DLocal acts as a specialized intermediary between global giants (Amazon, Google, Uber) and consumers in complex markets (Latin America, Africa, Asia).
- Core services:
- Pay-in (acceptance): Merchants can accept local payment methods (cards, wallets, barcode payments).
- Pay-Out (payout): Payouts to freelancers or suppliers on site.
- The "all-round carefree package": DLocal handles currency conversions (FX), compliance (anti-money laundering checks), regulatory hurdles and technical integration via a single interface.
- Competitive advantage: They solve problems in regions with fragmented banking systems, which sets them apart from competitors such as Stripe or Adyen $ADYEN (-1,49 %) sets them apart.
What are stablecoins and why are they booming?
Stablecoins offer a stable alternative to volatile cryptocurrencies.
- Advantages in emerging markets: They serve as a store of value in times of high inflation and enable almost instant, low-cost transactions around the clock, regardless of bank opening hours.
Opportunities through stablecoins
Stablecoins could help DLocal to become even more efficient:
- Faster settlement: Instead of using slow banking channels (SWIFT), DLocal can use stablecoins for internal cash flows, which improves liquidity.
- New products: Payouts directly to crypto wallets
- Market expansion: Access to customers who do not have bank accounts but use digital dollar assets.
- Transparency: Blockchain technology can strengthen processes through traceable data.
Risks and threats
- Elimination of the intermediary: If merchants pay their employees directly in stablecoins, they no longer need DLocal as a bridge.
- Margin pressure: Cheaper crypto alternatives could force DLocal to lower fees.
- Regulation: Crypto-native firms could operate more cheaply in regulatory gray areas than the tightly regulated DLocal.
DLocal's lead and strategy
- Pilot projects: DLocal is already using stablecoins for settlements with partners to cover weekends and national holiday.
- CEO vision: CEO Pedro Arnt sees stablecoins as an "institutional tool". DLocal is positioning itself as an important on- and off-ramp partner (exchange of crypto into local currency and vice versa).
- Strategic acquisition: The planned acquisition of AZA Finance strengthens this position. AZA has been using digital currencies for payment transactions in Africa and Asia for a decade.
Stablecoins may not revolutionize global payments overnight, but their long-term potential is hard to ignore, especially in regions where traditional infrastructure remains slow, costly or unreliable.
dLocal's approach reflects both strategic foresight and operational discipline, integrating stablecoins where they offer real value while continuing to build trust with merchants, regulators and financial institutions.
For now, stablecoins serve more as enablers than threats. However, should broader adoption take hold, driven by regulatory clarity and merchant demand, dLocal is well positioned to capitalize on this. The company is supported by a leadership team that understands both the promise and the pace of change.
The path may be gradual, but the direction is clear. While I don't see stablecoins as a near-term threat, they remain a relevant factor to keep in mind when evaluating dLocal's competitive advantage.
