Alibaba's VelaFi investment draws attention to Latin America's peso exchange rate payment innovation

Stablecoin-based payment infrastructure that blurs the line between fiat currency and cryptocurrency is gaining new attention. VelaFi, born with the goal of solving Latin America’s peso exchange rate volatility issues, has completed a $20 million Series B funding round as of January 12th.

The scale and significance of VelaFi’s investment

Since this funding round, VelaFi’s total funding has surpassed $40 million. The Series B round was led by XVC and Ikuyo, with notable participation from Alibaba Investment, a subsidiary of Alibaba. Planetree and existing investor BAI Capital also participated in this round.

The scale of investment and participation of top-tier investors demonstrate how much the international payment service based on stablecoins is valued as a significant market opportunity. Especially in developing countries where currency volatility and remittance costs are major challenges, solutions like VelaFi are attracting attention.

What is VelaFi: Who created it and how has it grown?

VelaFi is a subsidiary of Galactic Holdings, primarily driven by a Chinese startup team. Co-founder and CEO Maggie Wu is also the founder of the well-known venture capital group Krypital Group.

Galactic Holdings owned cryptocurrency wallets TruBit, TruBit Pro trading platform, and TruBit Business, an enterprise international payment solution. In 2025, the enterprise business division was rebranded as VelaFi and launched anew.

Currently, VelaFi is expanding its operations from Latin America into the US and Asia. According to official announcements, it already serves hundreds of corporate clients and handles billions of dollars in payment transactions.

Key issues in cross-border payments: Peso exchange rates and international remittances

International transactions in Latin America face numerous challenges. Exchange rate fluctuations among currencies like the Mexican peso, Brazilian real, and Colombian peso are unpredictable, and traditional international remittance methods involve high fees and slow processing times.

For example, when a Mexican exporter needs to pay a Brazilian supplier, the existing process involves multiple intermediary banks, takes several days, and exposes both parties to losses due to peso-real exchange rate fluctuations. VelaFi’s stablecoin-based solution offers a way to significantly reduce these inefficiencies.

Why did Alibaba invest in VelaFi: Optimizing payments in emerging markets

Alibaba is one of the world’s largest B2B and B2C e-commerce platforms. It understands better than anyone the chronic issues of high fees, long payment cycles, and exchange rate risks in international transactions.

VelaFi’s stablecoin-based infrastructure enables instant and low-cost international payments. Its Latin America-focused expansion aligns perfectly with the key growth regions of AliExpress and Alibaba International Station.

Through this investment, Alibaba is opening a pathway to leverage stablecoin technology to optimize local payment and merchant settlement experiences in emerging markets.

VelaFi’s three core service models

On-Ramp & Off-Ramp (Fiat entry and exit channels)

This is VelaFi’s most basic service. It focuses on solving the industry’s longstanding challenge of seamless currency exchange between fiat and stablecoins.

Entry (deposit): When a company’s end user makes a payment in local fiat currency (e.g., Mexican peso), the company receives equivalent value in stablecoins (e.g., USDT, USDC) or assets like Bitcoin.

Exit (withdrawal): When a company transfers stablecoins to VelaFi, VelaFi deposits the funds into the user’s account in local fiat currency via local banking networks.

Global payments and international fund transfers

Another core service is providing a direct payment route from ‘Fiat A to Fiat B.’ For example, if a Mexican company pays a Brazilian supplier, previously it required complex intermediary bank procedures. Now, by paying in pesos through VelaFi, the recipient directly receives reais.

VelaFi acts as a ‘payment accelerator’ built on top of traditional banking systems.

Integration with local payment systems

VelaFi’s greatest strength is its deep integration with major real-time payment systems in Latin America. It connects with Mexico’s SPEI, Brazil’s PIX, Colombia’s PSE, and others.

By linking these local payment infrastructures with stablecoin liquidity, VelaFi is paving the way for cryptocurrencies to go beyond blockchain assets and be practically used in cross-border e-commerce, outsourcing, and international trade.

Building trust through compliance

VelaFi focuses on the B2B market, requiring all corporate clients to undergo strict KYC (Know Your Customer) and KYB (Know Your Business) verification processes. This demonstrates VelaFi’s strategy to ensure regulatory compliance while building market trust.

Future outlook: Solving emerging market peso exchange rate issues with stablecoins

VelaFi’s success lies not only in technological innovation but also in addressing the real financial problems of emerging markets like Latin America. Volatility in peso exchange rates, high costs of international remittances, and slow payment speeds have hampered e-commerce and international trade, but services like VelaFi are poised to change that.

Investments from global e-commerce giants like Alibaba indicate that these changes are now recognized as tangible business value beyond mere technological discourse.