MercadoLibre Sees Notable Growth in Crypto Segment
MercadoLibre, the renowned e-commerce platform in Argentina, has experienced significant growth in its crypto segment. According to the company’s latest quarterly earnings report, MercadoLibre’s customers held a total of $21 million in crypto assets as of September 2023, marking a substantial increase from the $15 million reported in December of the previous year.
This surge in customer crypto assets is a testament to MercadoLibre’s growing influence in the e-commerce industry, with an impressive $10 billion in annual revenue. The company surpassed expectations in Q3, reporting remarkable figures of $3.8 billion in revenue and $685 million in profits. The success of MercadoLibre in Brazil and Mexico has played a pivotal role in this growth, as its operations in these regions have expanded significantly.
Mercado Coin and Crypto Offerings
As part of its efforts to establish itself as a leading player, MercadoLibre introduced its own cryptoasset named Mercado Coin in Brazil. Initially valued at 10 cents, the price of Mercado Coin has evolved in line with market dynamics. Furthermore, in December 2021, MercadoLibre began offering Bitcoin (BTC) and Ethereum (ETH) to its customers.
However, the recent earnings report did not provide specific details regarding the distribution of crypto assets across these different digital currencies.
The Crypto Boom in Argentina
Argentina has emerged as one of the fastest-growing cryptocurrency markets. Recent research from GWI reveals that Argentina has one of the highest ownership rates of digital assets, standing at 23.5%, second only to Turkey at 27.1%.
The increasing adoption of cryptocurrencies in Argentina is largely attributed to the country’s soaring inflation. In fact, Argentina’s inflation rate surpassed 100% this year, with February registering a staggering 102.5%. This inflationary trend has resulted in doubled prices for many consumer goods since 2022.
Given the challenges associated with obtaining physical dollars or other currencies due to stringent capital controls, many Argentinians are turning to digital tokens as a store of value.
While Argentina’s government has previously cautioned against the risks of digital assets, it has also acknowledged the potential benefits of blockchain technology and cryptocurrencies in driving the economy. In 2019, the country’s central bank established regulations for cryptocurrency exchanges, mandating compliance with anti-money laundering and counter-terrorism financing regulations. However, the same year saw the Argentine peso stabilize partially through the banning of cryptocurrency purchases using credit cards.
Earlier this year, Argentina’s Central Bank took a further step by prohibiting financial payment service providers from facilitating cryptocurrency transactions. This decision was made with the aim of reducing the exposure of digital assets in the country’s payment system.
“Argentina has seen a remarkable growth in cryptocurrency adoption due to its high inflation rate. The increasing ownership of digital assets reflects a shift in the population’s perception of cryptocurrencies as a viable alternative to traditional forms of currency.” – GWI Research
