Tokenisation as a Catalyst for Financial Inclusion and Market Efficiency in Latin America

Latin America's capital markets have long grappled with systemic inefficiencies: high transaction costs, fragmented liquidity, and exclusion of millions from formal financial systems. In 2025, however, blockchain-based tokenisation is emerging as a disruptive force, transforming how assets are issued, traded, and settled. For institutional and retail investors, this shift represents not just a technological leap but a strategic opportunity to capitalize on a $400 billion on-chain value ecosystem that is redefining financial inclusion and market efficiency in the region.

The Problem: A Market in Need of Disruption

Latin America's financial infrastructure lags behind global peers. Domestic credit to the private sector stands at 50% of GDP, far below the EU's 85% and East Asia's 170%. MSMEs, which drive much of the region's economy, receive less than 15% of total credit, while informal businesses remain locked out of formal systems due to documentation gaps. Cross-border transaction costs are exacerbated by outdated infrastructure, and liquidity constraints persist even as digital payment platforms like Brazil's PIX and Peru's Yape gain traction.

The Solution: Tokenisation as a Systemic Fix

Blockchain-based tokenisation—converting real-world assets into programmable digital tokens—is addressing these challenges head-on. By leveraging distributed ledger technology (DLT), tokenisation reduces settlement times from days to seconds, slashes intermediation costs, and unlocks liquidity in previously illiquid markets. For example, Brazil's Drex platform, built on Ethereum Layer 2, digitizes collateralized credit and bank deposits, enabling real-time interbank transactions and retail access to tokenized assets. This infrastructure, supported by global partners like Mastercard and Santander, is a blueprint for modernizing capital markets.

In Argentina, where inflation exceeds 100%, stablecoins like USDC and RSV have become a lifeline. Platforms such as Lemon allow users to preserve wealth and conduct cross-border transactions without relying on volatile local currencies. Meanwhile, tokenized real estate and commodities on Polygon and Avalanche are enabling fractional ownership, democratizing access to high-value assets for retail investors.

Case Studies: Proven Impact in 2025

1. Brazil's Drex Initiative: By tokenizing bank deposits and collateral, Drex has reduced liquidity risks in high-cost financing environments. Its pilot phase, involving $40 million in tokenized private credit instruments, demonstrates how blockchain can streamline asset-backed lending.
2. Argentina's Stablecoin Adoption: Over 90% of crypto transactions in Argentina now involve stablecoins, with platforms like Lemon processing $1.2 billion in 2025. This shift has bypassed capital controls and provided a stable store of value for 40% of the population previously excluded from formal banking.
3. Institutional Confidence: The IT Now Bloomberg Galaxy Bitcoin ETF, launched in Brazil, grew from $2 million to $125 million in AUM in 2024, reflecting institutional trust in digital assets. Regulatory clarity, such as Brazil's Virtual Assets Law (BVAL), is further attracting global investors.

Why Now? The Investment Case

The convergence of regulatory progress, infrastructure innovation, and demand for liquidity is creating a unique window for investors. Tokenised securities offer:
- Enhanced Liquidity: Fractional ownership and 24/7 trading enable instant access to assets like real estate and commodities.
- Cost Efficiency: Smart contracts automate settlement, reducing operational costs by up to 70% in pilot projects.
- Scalability: Cross-border interoperability, as seen in Mercado Pago's expansion of PIX into Argentina, hints at a unified Latin American digital payments network.

For investors, the opportunities are twofold:
1. Institutional Play: Allocate to tokenized real-world assets (RWAs) via platforms like Drex or ETFs like the IT Now Bloomberg Galaxy Bitcoin ETF, which now holds $125 million in AUM.
2. Retail Access: Invest in stablecoin-driven remittance platforms or fractional ownership tokens for real estate and commodities, which are projected to grow at a 25% CAGR through 2033.

Risks and Mitigations

While tokenisation is transformative, risks remain. Regulatory uncertainty in some countries and cybersecurity vulnerabilities could hinder adoption. However, Brazil's BVAL and Argentina's stablecoin frameworks provide a template for balancing innovation with oversight. Investors should prioritize projects with institutional-grade infrastructure and regulatory alignment.

Conclusion: A Paradigm Shift in Financial Inclusion

Latin America's tokenisation wave is not a speculative trend but a structural shift. By addressing inefficiencies in access, liquidity, and cost, blockchain-based solutions are building a financial ecosystem that mirrors global standards. For investors, the time to act is now—before the region's $400 billion on-chain market matures into a fully integrated, institutional-grade asset class.

The future of capital markets in Latin America is being written in code. Those who recognize the potential of tokenisation today will reap the rewards of a more inclusive, efficient, and liquid financial landscape tomorrow.