MercadoLibre, the well-known e-commerce platform in Argentina, has witnessed substantial growth in its cryptocurrency segment.
As per the company’s most recent quarterly earnings report, MercadoLibre’s customers collectively held $21 million in cryptocurrency assets as of September 2023. This marks a noteworthy increase from the $15 million reported in December of the previous year.
The uptick in customer-held cryptocurrency assets coincides with MercadoLibre’s continuous consolidation of its position as a major player in the e-commerce industry. The company has achieved an impressive annual revenue of $10 billion.
In its Q3 results, the company outperformed expectations, reporting an impressive $3.8 billion in revenue and $685 million in profits.
The growth of MercadoLibre’s cryptocurrency segment was primarily attributed to its success in Brazil and Mexico, where the company’s operations have significantly expanded.
It’s worth noting that MercadoLibre introduced its own cryptocurrency, called Mercado Coin, in Brazil. Initially, this coin was launched with an initial price of 10 cents, and its value has since fluctuated in accordance 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 a breakdown of the specific distribution of cryptocurrency assets among these various digital currencies.
Crypto Adoption in Argentina Finds Momentum
Argentina has emerged as one of the rapidly growing cryptocurrency markets, with substantial adoption.
Research by GWI reveals that Argentina boasts one of the highest rates of digital asset ownership, standing at 23.5%, second only to Turkey at 27.1%.
This surge in cryptocurrency adoption can be primarily attributed to the country’s staggering inflation rates. Argentina’s inflation rate has exceeded 100% this year. According to the country’s statistics agency, inflation reached 102.5% in February, indicating that the prices of numerous consumer goods have more than doubled since 2022.
The growing interest in digital tokens aligns with the challenges faced by residents of Argentina in acquiring physical dollars or other currencies due to strict capital controls.
Argentina’s government has maintained a somewhat dynamic approach toward cryptocurrencies.
In 2014, it issued warnings to users about the risks associated with digital assets. However, by 2017, the government acknowledged the potential benefits of blockchain technology and cryptocurrencies in stimulating the economy.
In 2019, the country’s central bank introduced regulations for cryptocurrency exchanges, mandating their compliance with anti-money laundering and counter-terrorism financing rules. During the same year, the purchase of cryptocurrencies using credit cards was banned as a measure to help stabilize the Argentine peso.
However, earlier this year, Argentina’s Central Bank took a more restrictive stance by prohibiting financial payment service providers from facilitating cryptocurrency transactions. This decision was made with the goal of reducing the exposure of digital assets within the payment system.