Could CBDCs, stablecoins shift institutional funding in emerging markets? Panelists weigh in

The Permissionless conference in Austin, Texas, saw a conversation about institutional investors curious about opportunities in emerging markets


Ground Picture/Shutterstock modified by Blockworks


Emerging markets today suffer from a scarcity of institutional funding in terms of DeFi and crypto-related solutions, Pablo Pizzimbono said Tuesday at the Permissionless conference in Austin, Texas.

Pizzimbono is the founder of CrossRegional Partners and Clave, an alternative asset manager and a crypto-based direct lending platform, respectively. 

One thing Pizzimbono’s fellow panelists believe could alleviate the dried up investor appetite in emerging markets is wider access to stablecoins and central bank digital currencies. 

CBDCs, for instance, could simplify the introduction to tokenized assets and borderless money, argued Credix Finance founder and CEO Thomas Bohner.

Specifically, the coexistence of those things could attract institutional investment into regions like Latin America for instance, Bohner said.

“I definitely think [stablecoins and CBDCs] can coexist next to each other. I think it’s a great way to get some institutions into this market, and I think we should definitely allow private stable coins to remain in existence, so that you can provide optionality.”

The assembled panelists appeared to agree that CBDCs are coming one way or another.

But it’s a bit more complicated than the utility of various crypto assets, in Pizzimbono’s view. His company, CrossRegional, manages institutional portfolios in Latin America, so he offered a behind-the-curtain look at what large investors consider when entering emerging markets.

He boiled it down to asset quality, governance, enforceability of collateral, and scalability.

“You need good assets, good credit characteristics, low defaults,” Pizzimbono said. 

Having efficient bankruptcy laws is another gateway for institutional investors into emerging markets, according to Pizzimbono. 

“The ability of an investor to enforce their security interests in the event of nonpayment is critical,” Pizzimbono said. “In Mexico […] with a well structured package, you’d have a lot of difficulty accessing their collateral because of those local court systems and they’re complex.”

Inefficiencies on the bankruptcy level are “very prohibitive” for local funding, Pizzimbono said.

Scalability is also important for institutions because they don’t really get a bang for their buck unless they’re investing $100 million plus, Pizzimbono said. 

That sentiment was echoed by panelist Nick Carmi, Circle’s vice president of institutional markets.

“From my experience with investors […] they want to be able to execute at size,” Carmi said. 

That means investing $1 million or $2 million is simply not enough. They want adequate reward for the risk they’re taking, Carmi added. 

Circle’s most recent entrance into an emerging market came in late August with a USDC integration with Mercado Libre in Chile.

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.


Upcoming Events

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Screen Shot 2024-05-16 at 14.53.45.png


Loss-versus-rebalancing (LVR) is arguably Ethereum DeFi’s biggest problem, and thus reducing LVR is fundamental to the success of Ethereum. This report dives into the world of LVR. We uncover its importance for AMM designers, discuss the two major mechanism design categories and various projects developing solutions, and offer a higher level perspective on the importance of AMMs in general.


Yesterday saw Congress’ upper chamber side with the House on a measure aimed at overturning SAB 121


Oklahoma’s new crypto bill will go into effect in November of this year


The deposits hit a $20 million cap in just 45 minutes


Twelve Democratic Senators voted in favor to pass the resolution Thursday

article-image is “aware” that bonding curve contracts on were exploited, and has since paused trading


Some investment pros are mulling crypto allocations between 1% and 10% and seeking ex-BTC exposure for interested clients