Brazil’s MercadoLibre introduces crypto loyalty program with MercadoCoin

One of South America’s largest e-commerce firms has created a new cryptocurrency that it will implement in Brazil as part of its loyalty program.

MercadoLibre Inc. announced that customers shopping on its platform will be able to earn MercadoCoins as cashback when purchasing products. The digital currency, which follows Ethereum’s ERC-20 token standard, can be used to make additional purchases on the e-commerce site or trade it on the company’s financial services unit MercadoPago.

Upon release, MercadoCoins will be available at $0.10 apiece to 500,000 customers in Brazil, before opening to market fluctuations and then the company’s total 80 million customer base by the end of August. While the firm currently has no plans to expand MercadoCoin to Latin American countries other than Brazil, it said for the time being that trading of the digital currency will be held exclusively on MercadoPago.

MercadoLibre’s country manager Fernando Yunes said the company was focusing on long-term opportunities rather than short-term market movements with the move. The company hopes to gain an edge as e-commerce competition in Brazil increases. Rival Sea Ltd’s Shopee reported a 270% rise in revenue in the second quarter, while China’s AliExpress has also gained ground.

Meanwhile, other companies in Brazil have begun supplementing their offerings with cryptocurrencies. Last month, Santander Brazil, a unit of Spanish banking giant Banco Santander, said it will offer cryptocurrency-related services to institutional and individual clients in the coming months. “We expect in the next few months to have definitions on that, who knows in the next release [of quarterly results]or even before,” CEO Mario Leao told Folha de S. Paulo.

In addition, Brazil’s largest brokerage, XP, announced that it would open its Xtage crypto trading platform to some clients this month. While only Bitcoin and Ethereum would be available initially, XP said a total of ten digital assets would be available by the start of 2023. XP’s director of financial products Lucas Rabechini told Reuters that the Xtage platform would be available to customers with a “sufficient investment “profile for such operations.”

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