Mercado Libre launches its own crypto-currency in Brazil

Brazilian e-commerce platform Mercado Libre has just announced the launch in Brazil of Mercado Coin, its own crypto-currency. Managed by its fintech Mercado Pago, this initiative is particularly interesting for the prospects it brings to commerce in terms of loyalty.

FACTS

• Mercado Libre, the leading e-commerce site in Brazil, will now offer its own crypto-currency. Called Mercado Coin, it can be used by the platform's customers to make their online purchases.

• The special feature of this offer is its full integration with the platform's loyalty programme. Customers will earn Mercado Coins that can be exchanged for cash back every time they make a purchase on the e-commerce platform.

• Based on the Ethereum blockchain, Mercado Coins will also be redeemable via the group's dedicated payment platform, Mercado Pago.

• A Mercado Coin will initially be worth $0.10 but the market will be sensitive to fluctuations thereafter.

CHALLENGES

• Complementing its offer: the e-tailer Mercado Libre is also a financial player that offers a digital payment platform called Mercado Pago. The launch of Mercado Coin is therefore not a completely disconnected initiative from its historical activities, especially as Mercado Libre entered the world of crypto-currencies in 2021 by launching a wallet allowing Brazilian users to buy and sell crypto-currencies.

• Consolidating its leadership position: The launch of its crypto-currency also represents a way for Mercado Libre to keep its customer base (nearly 80 million people) captive as competition from other platforms such as Shopee or AliExpress grows in the country.

MARKET PERSPECTIVE

• Mercado Libre has been working hard to rethink the Brazilian financial model for several years now. One of the ways it is doing this is through its Latin digital payment platform Mercado Pago.

• So, in addition to its crypto-currency, Mercado Libre partnered in March 2021 with leading Brazilian FinTech Nubank, as well as web giant Google, to create the Zetta association to promote the digitalisation of Brazilian financial services.

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