MercadoLibre, the renowned e-commerce platform in Argentina, has seen notable 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, a significant increase from the $15 million reported in December of the previous year.
The surge in customer crypto assets comes as MercadoLibre continues to establish itself as a major player in the e-commerce industry, boasting an impressive $10 billion in annual revenue.
The company exceeded expectations with its Q3 results, reporting a remarkable $3.8 billion in revenue and $685 million in profits.
The growth was primarily attributed to the success of MercadoLibre in Brazil and Mexico, where its operations have expanded significantly.
As reported, MercadoLibre rolled out its own cryptoasset, named Mercado Coin, in Brazil.
The coin was initially launched with a starting price of 10 cents, but its value has since evolved in line with market dynamics.
In addition to Mercado Coin, MercadoLibre also started offering Bitcoin ( BTC) and Ethereum ( ETH) to its customers in December 2021.
However, the recent earnings report did not provide a breakdown of the specific distribution of crypto assets among these different digital currencies.
Crypto Adoption in Argentina Finds Momentum
Argentina has been one of the fastest-growing cryptocurrency markets.
According to research from GWI, Argentina has one of the highest ownership rates of digital assets at 23.5%, only second to Turkey at 27.1%.
The growing crypto adoption is primarily attributed to the country’s soaring inflation.
Argentina’s inflation rate has soared past 100% this year. According to the country’s statistics agency, inflation hit 102.5% in February, suggesting the price of many consumer goods has more than doubled since 2022.
The shift toward digital tokens comes as residents of the country might have difficulty getting their hands on physical dollars or other currencies amid tight capital controls.
Meanwhile, Argentina’s government has historically taken a dynamic stance on cryptocurrency.
While it warned users of the risk of digital assets in 2014, the government acknowledged the benefits of blockchain and cryptocurrencies in driving the economy in 2017.
The country’s central bank also set regulations for cryptocurrency exchanges in 2019, requiring them to comply with anti-money laundering and counter-terrorism financing regulations.
In the same year, the country banned the purchase of cryptocurrency using credit cards as a partial measure to stabilize the Argentine peso.
However, earlier this year, Argentina’s Central Bank prohibited financial payment service providers from offering cryptocurrency transactions, citing a need to reduce the exposure of digital assets to the payment system.