The largest eCommerce firm in Latin America, Mercado Libre, launched Mercado Coin, a cryptocurrency based on the Ethereum blockchain, although it’s not really a typical cryptocurrency.
According to Reuters, it won’t be a stablecoin since it will be free-floating, have an initial value of $0.10, and only be exchanged on the company’s own Mercado Pago digital wallet. It won’t even be listed on outside exchanges just yet.
The USD Paxos (USDP) token, which was added to Mercado Pago in December along with bitcoin and ether as part of the company’s expansion of the digital wallet’s support for cryptocurrencies, is also a stablecoin that is already available. It is used by the WhatsApp messaging service that Meta is integrating.
Mercado Coin will be earned through the company’s loyalty program, and it will initially only be accessible in Brazil. It will be accessible to the 80 million clients of the corporation worldwide by the end of the month.
A Rare Form of Payment
One hypothesis is that it is similar to Facebook Coin, the company’s 2011–2013 internal trial with digital money.
Facebook Credits were a proprietary virtual currency that could be used to make payments on the website rather than a blockchain-based cryptocurrency like Meta’s more recent but equally failed Libra/Diem stablecoin plan (2019-2022). Similar in value at 10 cents, but intended for independent sellers using the Facebook network.
However, the primary problem was that there wasn’t enough to buy on the site to entice customers to use it. It didn’t help that Facebook got a 30% share of every sale.
Given that Mercado Libre is the largest online marketplace in Latin America and Amazon’s major competitor, it doesn’t seem likely that consumers would find it difficult to find a way or a purpose to spend it.
Financial behemoth J.P. Morgan launched JPM Coin in February 2019 on its Quorum blockchain, a permission system only available to authorized partners. JPM Coin and Mercado Coin seem similar in certain ways (and sold to Consensys in August 2020). Even though it was a back-end, or wholesale, settlement token that could be used between companies using Quorum to conduct internal-only value transactions, it was a cryptocurrency for a closed environment.
