Regulatory and Strategic Shifts in Latin American Crypto Markets: Nubank and Tether Signal Evolving Opportunities and Risks for Investors

The Latin American crypto market has emerged as a critical battleground for institutional innovation and regulatory experimentation in 2025. As economic instability, inflationary pressures, and digital banking adoption converge, players like Nubank and Tether are reshaping the landscape. Their strategic moves—coupled with divergent regulatory approaches across the region—highlight both the risks and opportunities for crypto investors navigating this dynamic environment.

Regulatory Divergence: A Double-Edged Sword

Latin America's regulatory frameworks are increasingly fragmented, creating both hurdles and openings. Argentina, under President Javier Milei, has embraced crypto-friendly policies, including Law No. 27,739, which mandates virtual asset service provider (VASP) registration and strengthens anti-money laundering (AML) rulesLATAM’s Crypto Regulation and Blockchain Frameworks in 2025: Key Changes and Industry Impact^[1]. This has spurred on-chain inflows of $91 billion between July 2023 and June 2024Brazil Cracks Down on $9.7B Crypto Laundering, Nubank Halts Nucoin Trading^[2], positioning Argentina as a regional leader. By contrast, Brazil's Virtual Assets Act (Law No. 14,478/22) introduced a 15% tax on foreign exchange-held crypto profits and a 3.5% IOF-FX rate on outbound transfersLATAM’s Crypto Regulation and Blockchain Frameworks in 2025: Key Changes and Industry Impact^[1]. These measures, while aimed at curbing tax evasion, risk driving institutional activity to less regulated jurisdictions.

Chile's balanced approach—codified in the Fintech Law and General Rule No. 502—offers a middle path, legalizing stablecoins as payment tools while enforcing VASP complianceLATAM’s Crypto Regulation and Blockchain Frameworks in 2025: Key Changes and Industry Impact^[1]. Colombia's regulatory sandbox, “La Arenera,” further illustrates the region's experimentation with innovation-friendly oversightLATAM’s Crypto Regulation and Blockchain Frameworks in 2025: Key Changes and Industry Impact^[1]. For investors, this divergence means opportunities in Argentina and Chile but caution in Brazil, where regulatory overreach could stifle growth.

Nubank's Strategic Pivots: From Nucoin to Stablecoin Payments

Nubank, Latin America's largest digital bank, has recalibrated its crypto strategy in response to regulatory and market pressures. In Q3 2025, the company suspended trading for its proprietary Nucoin, allowing users to convert it into Bitcoin or USDC by December 9Brazil Cracks Down on $9.7B Crypto Laundering, Nubank Halts Nucoin Trading^[2]. This move reflects a shift from token-based loyalty programs to leveraging stablecoins for practical use cases.

The bank's vice-chairman, Roberto Campos Neto, has emphasized that stablecoins are transitioning from speculative assets to functional mediums of exchange, particularly in high-inflation economies like Argentina and VenezuelaBrazil Cracks Down on $9.7B Crypto Laundering, Nubank Halts Nucoin Trading^[2]. Nubank's recent announcement to enable stablecoin payments for credit card transactions—using USDT and USDC—signals a broader integration of blockchain into traditional banking systemsBrazil Cracks Down on $9.7B Crypto Laundering, Nubank Halts Nucoin Trading^[2]. This aligns with regional trends: 71% of Latin American firms now use stablecoins for cross-border payments, and 92% report readiness in wallet and API infrastructureLatAm Stablecoin Payments Landscape 2025: Full Overview^[3].

For investors, Nubank's pivot underscores the growing legitimacy of stablecoins as infrastructure tools. However, the bank's reliance on dollar-pegged assets exposes it to U.S. regulatory risks, particularly as the U.S. tightens stablecoin oversight under the GENIUS Act.

Tether's Dual Strategy: Compliance and Expansion

Tether, the dominant stablecoin issuer, has adopted a dual approach to navigate regulatory headwinds. While preparing to re-enter the U.S. market under stricter reserve requirements, the firm has deepened its Latin American footprint by relocating its headquarters to El Salvador—a nation that recognizes Bitcoin as legal tender—and investing in Orionx, a Chile-based crypto infrastructure firmLATAM’s Crypto Regulation and Blockchain Frameworks in 2025: Key Changes and Industry Impact^[1].

Tether's CEO, Paolo Ardoino, has stated that the company is “well in progress of establishing our U.S. domestic strategy,” focusing on institutional markets and interbank settlementsLATAM’s Crypto Regulation and Blockchain Frameworks in 2025: Key Changes and Industry Impact^[1]. Meanwhile, its role in El Salvador's Volcano Bonds project and Digital Asset Issuance Law highlights its strategic alignment with pro-crypto governmentsLATAM’s Crypto Regulation and Blockchain Frameworks in 2025: Key Changes and Industry Impact^[1]. Over the past year, Tether has also frozen $2.9 billion in USDT linked to illicit activity, demonstrating compliance efforts amid U.S. scrutinyLatAm Stablecoin Payments Landscape 2025: Full Overview^[3].

For investors, Tether's expansion in Latin America—where it controls 90% of crypto activity in Brazil and 70% in ArgentinaLATAM’s Crypto Regulation and Blockchain Frameworks in 2025: Key Changes and Industry Impact^[1]—suggests a long-term bet on the region's stablecoin-driven financial transformation. However, its U.S. regulatory challenges and the volatility of Bitcoin's adoption in El Salvador remain risks.

Opportunities and Risks for Investors

The interplay of regulatory shifts and institutional strategies creates a nuanced investment landscape:

1. Opportunities:
2. Stablecoin Infrastructure: Nubank's and Bitso's integration of stablecoins into payments and remittances (e.g., $12 billion in stablecoin-based transactions handled by BitsoLatAm Stablecoin Payments Landscape 2025: Full Overview^[3]) points to a $100+ billion market opportunity in cross-border efficiency.
3. Regulatory Arbitrage: Argentina's and Chile's crypto-friendly frameworks attract institutional capital, while Brazil's regulatory tightening may drive innovation in offshore compliance solutions.

4. Institutional Partnerships: Tether's collaboration with Orionx and El Salvador's government illustrates how stablecoin firms can leverage political support to scale infrastructure.

5. Risks:

6. Regulatory Overreach: Brazil's tax policies and the U.S. GENIUS Act could disrupt stablecoin liquidity and institutional profitability.
7. Compliance Costs: The FATF's Travel Rule enforcement in Brazil and Argentina increases operational complexity for crypto firms.
8. Market Volatility: While stablecoins are designed to be resilient, their adoption in high-inflation economies exposes them to currency devaluation risks.

Conclusion: A Region in Transition

Latin America's crypto markets are at an inflection point. Nubank's pivot to stablecoin payments and Tether's strategic expansion reflect a broader shift toward institutional-grade crypto infrastructure. For investors, the region offers high-growth potential in stablecoin-driven financial services, but success will depend on navigating regulatory fragmentation and compliance challenges. As Argentina's regulatory clarity contrasts with Brazil's tightening controls, the key will be identifying jurisdictions where innovation and oversight align—a balance that could redefine the future of crypto in the region.