Mercado Livre has just launched its cryptocurrency, Mercado Coin. The cryptocurrency was developed as ERC-20, on the Ethereum blockchain and will be sold Mercado Pago, with an initial price of $0.10 USD, but its value may vary depending on market demand, Mercado Livre explained during the announcement.
The Mercado Livre cryptocurrency was already released on Thursday, the 18th, and will initially only be available in Brazil, But there is an intent to expand to other countries, although no timetable for expansion has been provided.
In addition, Mercado Livre said that it expects a very large stickiness of the cryptocurrency given that there are currently about 500,000 users who can use and receive Mercado Coin. Also according to the company, the number of enabled users will be increased every day with the hope of Mercado Livre Until the end of August, 80 million Mercado Livre 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, but the perspective is that the transfer to external addresses will be released soon. In that first moment Mercado Livre also revealed that there are no benefits for platform sellers Since Mercado Coin is a tool to encourage users to buy, but there are plans in the future to integrate the entire ecosystem.
Mercado Livre also revealed that it already has more than 2 million users buying and selling Bitcoin, Ethereum and USDP on the platform, through a partnership with Paxos, which according to the company is being maintained and can be expanded. This volume, according to the company, brings good prospects for Mercado Coin.
Cryptocurrency can also be “combined” with other payment methods at the time of payment, i.e.The user will be able to pay for the products with Mercado Coin and other payment methods such as credit cards.
As revealed by Mercado Livre, cryptocurrency does not have “heavyness” like a stablecoin, but there are liquidity pools 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, therefore, Mercado Livre will make the transfer and the Fiat seller will receive exactly the amount that was advertised for the sale, therefore, in this system, Mercado Livre will act as the “guarantor” of the value of the Mercado Coin.
“We have a central liquidity pool, but we don’t have plans yet to launch that pool in a DEX, like Uniswap. We won’t get involved in the price, it will be variable and it will follow supply and demand. When the customer pays with Mercado, the senior director of corporate development at Mercado Lever said Gilherme Cohn, Senior Director of Corporate Development. The coin at the time of purchase will be guaranteed to the seller who will receive it in the local currency, in the case of Brazil, in Reyes.”
MercadoLibre announced that the cryptocurrency will be distributed to MercadoLibre customers with every purchase as long as the product’s MercadoCoin cashback system is activated. The Mercado Livre cryptocurrency can also be used to pay for products on Mercado Livre and can also be bought and sold on the Mercado Pago app.
“We were born with Mercado Coin linked to the Mercado Livre system, as a cashback system, but it has been developed for the market and will be traded elsewhere. The future brings many opportunities for Mercado Coin and this is just the beginning,” highlighted Fernando Yunus, Free Market Leader in Brazil.
According to Mercado Livre, the development of the Mercado Coin project began about a year and a half ago, with several cross-functional teams: tech, legal and executive. The percentage of Mercado Coin that Mercado Livre customers will receive for each purchase will vary and will be determined by the Mercado Livre trading team according to each event and product, and may vary on major purchase events, such as Black Friday, Mother’s Day, among others.
“Not all purchases will receive Mercado Coin as cashback. This will be determined by the trading team. Those without a Mercado Pago account will also receive Mercado Coin and will be able to use our cryptocurrency at the time of payment at that time,” said Fernando Yunus.
The creation and launch of the cryptocurrency Mercado Livre was developed in partnership with Ripio. Mercado Livre highlighted that it had spoken with regulators before announcing the launch of the cryptocurrency and that all KYC procedures and the national financial system would be respected.
Although the Mercado Livre cryptocurrency is only traded on Mercado Pago at the moment, all transactions are processed by Ripio, via a crypto-as-a-service. In addition, Ripio will also perform all cryptocurrency custody services.
Priscilla Farrow highlighted: “We are very happy to give this good news to the market and this is a huge difference for us compared to our competitors.”
Initially, Mercado Coin will only be listed on Mercado Pago and for Mercado Livre users, however, due to the partnership with Ripio, the cryptocurrency will also be listed on Ripio and possibly other exchanges. The company also revealed that although it is a partner in the Mercado Bitcoin exchange, it was not involved in the development process of Mercado Coin, but it could be an important partner in the future.
“We are happy to be one of the investors in the bitcoin market, but they do not have an initial stake in this project, but when it expands we can definitely talk to them,” Cohen said.
Mercado Livre highlighted that Mercado Coin is an important part of Mercado Livre’s future plans and that the company today has many people working on projects involving cryptocurrency. In addition, she revealed that the cryptocurrency market does not have specific regulations in Brazil, but that Mercado Coin and Mercado Pago will follow all that the national regulators recommend for good practice.
The company revealed that there are no plans to integrate Mercado Coin with its Decentralized Finance (DeFi) platform and no applications targeting Web3.
“Mercado Coin is an innovative tool that enriches our loyalty program and generates a new experience within the platform. This new product adds even more value to the loyalty relationship with millions of users, because the more purchases they make, the more money they receive from Mercado Coin. We are very excited about this milestone. What’s new in our ecosystem,” concluded Fernando Yunus.
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