MercadoLibre Launches Cryptocurrency in Brazil

MercadoLibre, MercadoCoin, eCommerce, loyalty

Latin American eCommerce giant MercadoLibre has launched a cryptocurrency known as MercadoCoin, which it will roll out in Brazil in connection with its loyalty program.

According to Reuters, the company announced the launch at a news conference Thursday (Aug. 18), saying clients can earn MercadoCoins as cashback when purchasing products on its eCommerce platform.

From there, they can use the digital currency — which uses Ethereum’s ERC-20 token standard — to make new purchases or trade it on the company’s financial services arm MercadoPago. Reuters said MercadoLibre’s cryptocurrency will be initially valued at $0.10 apiece, prior to being open to market fluctuation.

It is now available for 500,000 users in Brazil with a wider rollout to the company’s 80 million-strong customer base expected by the end of the month.

The firm said it doesn’t know when it will expand the currency to other parts of Latin America, per Reuters. For now, it will not be traded on other exchanges beyond MercadoPago.

While the launch of the coin follows a recent crypto market slump that led to the collapse of companies such as Celsius, MercadoLibre’s Brazil chief Fernando Yunes told the news conference the company is focused on long-term gains and not short-term market movements.

Earlier this month, MercadoLibre reported that it was seeing record revenues despite an economic slowdown that’s hit Latin America along with much of the rest of the world.

Read more: LatAm’s eCommerce Boom Propels MercadoLibre to 53% Increase in Sales

MercadoLibre’s net sales rose 53% in the most recent quarter versus the same time last year, with revenue reaching $2.6 billion, exceeding the $2.5 billion estimate of analysts.

In related news, blockchain and crypto solution provider Ripple announced a collaboration with Travelex Bank to launch RippleNet’s On-Demand Liquidity (ODL) offering in Brazil.

Learn more: Ripple, Brazil’s Travelex Bank Add Crypto-Based X-Border Payments

“From Day One, we’ve focused on building solutions that deliver real utility and we are excited to collaborate with an innovative partner like Travelex Bank to help move money more efficiently for the benefit of its customers across Brazil,” Ripple CEO Brad Garlinghouse said.

The companies said Brazil is a promising market for their services because of the vast amount of payments sent into the country each year and because its government has regulated the crypto industry in a way that protects consumers while fostering innovation.

For all PYMNTS crypto coverage, subscribe to the daily Crypto Newsletter.

Bank of America’s Take on Latin America’s Digital Payments Advantage

Digital payments are growing in Latin America as companies like Mercado Libre and TerraPay rapidly advance digital banking and digital wallets in the region.

Central bank instant payments mandates and modernized infrastructure in Brazil have also moved the needle to the point where the region is arguably moving faster toward digital transformation than anywhere else in the world.

PYMNTS Intelligence’s “How the World Does Digital” report surveyed 67,000 consumers across 11 different countries. It found that Brazil was far ahead of all of them — including the United States — in digital engagement. Drilling down into the results, in 2023, 66.8% of Brazilians used mobile banking apps on their phones at least once a month, and 46.8% used these apps at least weekly.

Consumers in Brazil are embracing digital payments as well. The report found that by 2023, two-thirds of consumers in Brazil had smartphones and 75% had debit cards. In the same year, 77% of consumers in Brazil were using Pix, the instant payments app for mobile phones launched by the country’s central bank.

“After many decades of the status quo in payments, Latin America is going through a major transformation,” Marcelo Moussalli, managing director and Latin America product head executive at Bank of America, told PYMNTS.

That transformation is being driven by the two largest economies in the region — Brazil and Mexico — representing roughly two-thirds of the total GDP of Latin America, he said. Regulators in those countries launched new payments initiatives aimed at modernizing their respective banking systems.

The top-down, mandate-driven approach has been focused on boosting competition while lowering transaction costs, increasing transaction security and fostering wider financial inclusion. Beyond the commonality of the goals, the governments in Brazil and Mexico took different approaches to get there.

Similar Goals, Differing Approaches

Brazil, for its part, introduced the Pix real-time payments network. Mexico’s innovations have included a peer-to-peer (P2P) network and a digital collection capability underpinned by QR code technology.

“In both countries, these innovations are improving [payments] speed, visibility and the overall user experience,” Moussalli said.

Against that backdrop, the adoption of real-time rails and new payment modalities has, in some cases, exceeded expectations, but there is still a robust greenfield opportunity, he said.

By way of example, in 2020, Pix’s first year, the network captured 16% of Brazil’s electronic payments volumes; that tally has grown to 40% as recently as this year. Mexico’s real-time payments network has grown 6% year on year as measured in 2024, with 60 million individuals using the network, although the QR codes and P2P networks have notched less adoption than originally anticipated.

The trend is inexorable, however. Although some businesses have been hesitant to pivot more fully to these new payment modalities and may cling to traditional methods such as cash, as time goes on, “it’s going to be hard to do business in Mexico or Brazil” without connecting to these rails, Moussalli said.

“They’re going to miss out on opportunities if they don’t adopt new digital payment options,” he said.

That’s especially true in commercial payments, where suppliers will increasingly demand to be paid in real time.

Asked by PYMNTS about how traditional financial institutions can help enterprise clients embrace change, Moussalli said Bank of America launched support for QR codes, which clients can access through the CashPro banking platform. Clients scan codes from paper or electronic invoices, and within seconds the platform retrieves the invoice details from the beneficiary bank and displays those details for review and confirmation of payment.

“This dramatically speeds up the payments process” beyond the confines of paying suppliers and into the realm, for example, of mandatory transactions that companies make for employees’ retirement benefits, Moussalli said. That “helps eliminate bureaucracy in processing payments.”

The feature has been so well-received in Brazil that it is being explored for use in Europe, he said.

Although regulators initially drove innovation in financial services in Brazil and Mexico, the central banks are well connected to their respective markets and are working with banks and merchants to foster the shift to digital transactions, Moussalli said. Cash withdrawals from banks have plummeted in the double digits. There’s particular promise in pivoting to digital payments in Mexico where cash is still tied to 85% of all retail transactions, especially for transactions below the U.S. dollar equivalent of $50.

“The impact of these changes is ongoing,” said Moussalli, adding, “there’s no going back.”