On October 13th, Tether announced a seed round of investment in the Latin American fintech company EFY Finance, with the goal of expanding institutions' ability to use stablecoins for cross-border payments and local settlements. The announcement did not disclose the amount or valuation, so it is unfounded to claim that this represents a financing of a certain scale, or to calculate what percentage of the market EFY has already captured based on this. What is truly worth focusing on is the practical implications of this collaboration: while stablecoins can be transferred on-chain, companies still need to pay employees, suppliers, and receive local currencies in the end. Converting digital dollars into funds available in local bank accounts remains the most difficult and costly part of many cross-border transactions.
EFY is positioned in official statements as providing stablecoin payment infrastructure, cross-border remittance services, and channels for converting between digital currencies and fiat money for enterprises. Tether claims that the company covers more than 12 currencies and payment corridors, capable of settling funds into local bank accounts in 17 countries, and boasts over 25,000 active individual and business accounts. It's important to note that these figures are self-stated by the partners in this announcement and are not independently audited market shares; moreover, not all corridors offer the same level of immediacy and cost efficiency. EFY has also obtained a license from Salvadoran digital asset service providers, indicating that it has the necessary qualifications in that particular jurisdiction, but this does not mean that the entire Latin American region enjoys a universal license. Latin America is not a unified market, and regulatory frameworks, bank interfaces, and currency exchange rules are highly fragmented.
Just because money can be put on the blockchain doesn't mean it will automatically appear in the recipient's bank account.
The promotion of stablecoin cross-border payments often focuses on “transfers in just a few minutes,” but the real challenges faced by corporate finance departments are much more complex. Has the counterparty completed identity verification? What currency does the payer use for funding? In which country and at which bank should the recipient receive the local currency? How is the price locked in between placing an order and conducting the exchange? Who handles transactions that are rejected, incorrect address entries, or bank holidays? On-chain transfers are just one part of this process. Service providers like EFY attempt to connect on-chain US dollars with traditional banking systems, and it is this type of infrastructure that Tether invests in, rather than claiming that all future cross-border remittances can bypass banks. Especially for large payments made by compliant companies, auditing, anti-money laundering measures, and transaction records may be even more critical than the cost of a single on-chain fee.
The announcement also mentions the use of digital currencies such as USD ₮ and USA ₮ in payment scenarios. Although they have similar names, they should not be confused. USD ₮ is the well-known Tether token; USA ₮ has a different issuing entity and applicable architecture, and the announcement does not imply that Tether directly issues or guarantees that there is an identical legal relationship between the two. When writing reports, it is important to distinguish between tokens, issuers, service providers, and investors. Just because a platform supports one stable coin does not mean it necessarily supports another, nor can it be assumed that conversions can be completed without any loss at any time. For enterprises, what is truly important are the disclosure of specific currency reserves, redemption channels, counterparty risks, and how the platform handles local fiat currency payments.
The reason why the Latin American market repeatedly appears in the territory of stablecoin companies is that there are indeed frictions between cross-border trade, remittances, and different monetary systems; however, this does not mean that demand will naturally flow towards any application that announces support for stablecoins. Enterprises often already have existing processes consisting of banks, payment institutions, and financial software. For new solutions to be adopted, it must be proven that the total cost, time to receipt, failure rate, and tax reporting audits are more controllable than the old processes, rather than just comparing the fastest part of on-chain transfers. On the other hand, for some enterprises that are already priced in US dollars and have suppliers distributed across multiple countries, being able to integrate fund receipts, exchanges, and local payments into a single operational interface may indeed reduce the burden of reconciliation. The size of the benefits depends on the liquidity of each "corridor" (path of transaction flow) and the actual fees involved.
How many infrastructure problems can one investment solve?
The direct significance of the seed round of investment is to provide capital and strategic partners for EFY to expand its products and coverage in compliance with regulations. However, the announcement did not disclose detailed milestones for the use of the funds, nor did it make any commitments regarding transaction volumes for the following year. The motivation behind Tether can be inferred from its public strategy: to make the digital dollar more commonly used in real-world business payments, thereby enhancing the network and scenarios of its application. Nevertheless, this is an interpretation of the strategy, not an operational result that has already been achieved through cooperation. Whether EFY can expand to more countries depends on obtaining support from local partner institutions one by one, maintaining sufficient liquidity, and addressing the varying restrictions on digital asset payments in different regions. A mere "regional map" alone cannot replace these practical implementation efforts.
This collaboration also indicates a shift in competition within the stablecoin industry. In the early stages, projects competed on issuance volume and exchange liquidity, followed by on-chain transfer speeds. Nowadays, more companies are vying for control of the system entry points for corporate settlements. Whoever controls payment instructions, foreign exchange quotes, compliance checks, and bank withdrawal interfaces is closer to managing the day-to-day operations of businesses. Becoming an investor in Tether does not automatically mean that all transactions in EFY will use the tokens associated with Tether; the specific supported currencies and settlement routes still depend on the requirements of customers, regulators, and counterparties. At the same time, traditional payment institutions are also working to develop faster cross-border networks, so the binary narrative that “stablecoins will inevitably defeat banks” is not quite realistic. What is more likely is that multiple approaches will coexist, with choices made based on the specific transaction scenarios.
For potential customers, pilots are more important than slogans. A verifiable test should at least record the amount sent, the amount credited in the local currency, the total fees, the time taken from sending to bank settlement, as well as the refund and customer service processes in case of any abnormalities. It is also necessary to clarify who the partner providing the bank account is, how the responsibilities for managing the funds and tokens are divided, and whether there are any limits on the amounts. Such comparisons can turn the marketing claim of “stablecoin payments being faster and cheaper” into measurable service indicators. As for the investment amount, valuation, and profit sharing, the official information has not been made public, and reports should not include fictional figures.
As of now, what can be confirmed is that Tether is participating in the seed round of EFY, and EFY claims to have multi-currency, multi-country bank settlement services and a certain user base. What remains to be verified is how far the new investment can advance coverage, compliance, and the efficiency of real transactions. The payment networks in Latin America are complex, and it is precisely because of this complexity that this investment is worth reporting on; however, due to its complexity, it cannot be claimed that the problems have already been solved just by announcing the investment.
Image source: Tether The joint visual design for this investment announcement is by Tether and EFY. Trademarks are used solely for identifying the subjects of the report and do not imply that both companies endorse the views expressed in this article.
