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A brand-new cryptocurrency dubbed MercadoCoin has been created and will be used in Brazil as part of MercadoLibre Inc's (MELI.O) loyalty program, according to an announcement made on Thursday by the largest e-commerce company in South America. At a press conference, MercadoLibre declared that customers would receive cashback from MercadoCoins for making purchases on the online store. After that, they can make new purchases with the virtual currency, which adheres to Ethereum's ERC-20 token standard, or trade it on MercadoPago, the company's financial services division.
MercadoLibre Prioritizing Long-Term Potential
The decision comes as competition in Brazil's e-commerce market heats up, with China's AliExpress and Sea Ltd's Shopee claiming a 270% revenue increase there in the second quarter. It also comes after a decline in cryptocurrency markets earlier this year, which saw the collapse of industry titans like Celsius and Voyager. Fernando Yunes, the country head for MercadoLibre, asserted that the company prioritized long-term potential over cyclical market fluctuations.
MercadoLibre's Cryptocurrency
The cryptocurrency issued by MercadoLibre will have an initial value of $0.10 before being subject to market fluctuations. Beginning on Thursday, it will be accessible to 500,000 clients in Brazil, and by the end of August, it should have reached all 80 million of the company's clients there. The company acknowledged that it was still unsure exactly when it would bring MercadoCoin to other Latin American nations besides Brazil. However, they highlighted that MercadoPago would be the only place to trade digital currencies.