Mercado Libre has just launched its own cryptocurrency, Mercado Coin. The cryptocurrency was developed as ERC-20, in the Ethereum blockchain and will be sold in Mercado Pago, with an initial price of 0.10 dollars, but its value may vary according to market demand, Mercado Libre explained during the announcement.
The Mercado Libre cryptocurrency has already been launched this Thursday the 18th, and initially it will only be available in Brazil, but there is an intention to expand to other countries, although a schedule for the expansion has not been presented.
Also, Mercado Libre said that it expects a very large take-up of the cryptocurrency as there are currently some 500,000 users qualified to use and receive Mercado Coin. In addition, according to the company, the number of qualified users will increase every day and Mercado Libre expects that by the end of August all 80 million Mercado Libre customers will have access to the cryptocurrency.
The company highlighted that initially it will not be possible to transfer Mercado Coin to an external wallet, however the perspective is that the transfer to external addresses will be released soon. At this first moment, Mercado Libre also revealed that there are no benefits for sellers on the platform, since Mercado Coin is a tool to encourage user purchases, but in the future there are plans to integrate the entire ecosystem.
free market too revealed that it already has more than 2 million users buying and selling Bitcoin, Ethereum, USDP on the platform, through a partnership with Paxos, which the company says is ongoing and can be expanded. This volume, according to the company, provides good prospects for Mercado Coin.
The cryptocurrency can also be “combined” with other forms of payment at the time of payment, that is, the user can pay for the products in part with Mercado Coin and in part with other forms of payment. like credit cards.
As revealed by Mercado Libre, the cryptocurrency does not have a “ballast” like a stablecoin, but there are liquidity funds that guarantee the value of the asset. In addition, when the payment is made with Mercado Coin, the seller, at the other end, will not receive the cryptocurrency and therefore Mercado Libre will make the conversion and the seller will receive in fiat exactly the amount that was announced for the sale, so in this system Mercado Libre will act as a “guarantor” of the value of Mercado Coin.
“We have a centralized liquidity pool, but we have no plans yet to release that pool in DEX, like Uniswap. We will not intervene in the price, it will be variable and will follow supply and demand. When the client pays with Mercado Coin, the value of market at the time of purchase will be guaranteed to the seller, who will receive the local currency, in the case of Brazil, in Reais,” said Guilherme Cohn, Director of Corporate Development at Mercado Libre.
Coin Market
Mercado Libre has announced that the cryptocurrency will be distributed to Mercado Libre customers with each purchase as long as the product has the Mercado Coin cashback system activated. The Mercado Libre cryptocurrency can also be used to pay for products in Mercado Libre and can also be bought and sold in the Mercado Pago app.
“We were born with Mercado Coin linked within the Mercado Libre system, as a cashback system, but it was developed for the market and will be marketed in other places. The future brings various opportunities for Mercado Coin and this is just the beginning”, Fernando highlighted. Yunes, leader of Mercado Libre in Brazil.
According to Free Market, the Mercado Coin project began to develop about a year and a half ago, with several cross-functional teams: technology, legal and executives. The percentage of Mercado Coin that Mercado Libre customers will receive for each purchase will vary and will be defined by the Mercado Libre sales team based on each event and productand may vary in big shopping events, such as Black Friday, Mother’s Day, among others.
“Not all purchases will receive Mercado Coin as money back. This will be defined by the commercial team. Those who do not have a Mercado Pago account will also receive Mercado Coin and will be able to use our cryptocurrency at the time of payment,” said Fernando Yunes.
The creation and launch of the Mercado Libre cryptocurrency was developed in collaboration with Ripio. Mercado Libre stressed that it has spoken with regulators before announcing the launch of the cryptocurrency and that all KYC and national financial system procedures will be respected.
Although Mercado Libre’s cryptocurrency is only traded on Mercado Pago at this time, all transactions are processed by Ripio, through crypto as a service. In addition, Ripio will also perform the entire cryptocurrency custody service.
“We are very happy to bring this good news to the market and this is a great differentiator for us compared to our competitors”, highlighted Priscila Faro
At first, Mercado Coin will only be listed on Mercado Pago and for MercadoLibre users, however, due to the partnership with Ripio, the cryptocurrency will soon be listed on Ripio and possibly other exchanges as well. The company has also revealed that, although it is a partner of the Bitcoin exchange markethas not participated in the development process of Mercado Coin, but could be an important partner in the future.
“We’re happy to be one of the investors in Mercado Bitcoin, but they don’t have any initial involvement in this project, but when it scales up we can certainly talk to them,” Cohn said.
Mercado Libre highlighted that Mercado Coin is an important part of Mercado Libre’s future plans and that today the company has many people working on projects related to cryptocurrencies. In addition, he revealed that the cryptocurrency market does not have a specific regulation in Brazil, but Mercado Coin and Mercado Pago will follow everything that the national regulators recommend for good practices.
The company revealed that there are no plans to integrate Mercado Coin with the decentralized financial system (DeFi) or Web3-oriented applications.
“Mercado Coin is added as an innovative tool that enriches our loyalty program and generates a new experience within the platform. This new product adds even more value to our loyalty relationship with our millions of users, since the more purchases they make, the greater the amount of Mercado Coin will be. We are very excited about this new milestone in our ecosystem”, concluded Fernando Yunes.
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