The online retail platform Mercado Livre is today launching its own cryptocurrency, Mercado Coin, which will work as a kind of cashback to strengthen its loyalty program. With each purchase, customers will receive an amount of Mercado Coin that can be used for discounts on future purchases, accumulated in their profile, or exchanged for cash if the customer has a Mercado Pago account.
"We imagine a very large adhesion and engagement in our loyalty program," said earlier the president of Mercado Livre, Fernando Yunes. The launch takes place today for 500,000 people and will, by the end of August, be expanded to the entire customer base of Mercado Livre in Brazil. The currency does not expire and will only be for purchases, with no changes in the payment made by the platform to sellers.
In addition, as it can be used for discounts on purchases, the customer does not need to have a Mercado Pago account, unless he wants to sell the cryptocurrencies, which will be traded exclusively on this system. There is no set percentage of how many cryptocoins will be obtained with each purchase. This percentage will be defined according to the commercial management of the platform. For example, on special dates such as Mother's Day, Father's Day, or Black Friday, customers may get more Mercado Coins with each purchase.
In the future, according to the executive, the cryptocurrency may be taken to operations in other countries, but there is no timetable yet. The cryptocurrency may in the future transfer Mercado Coins to other cryptocurrency wallets, but there is also no estimate of when.
The coin launched today starts at $0.10, but its value will vary according to the supply and demand of this asset within the online retailer's ecosystem. As Guilherme Cohn, senior manager of corporate development at Mercado Livre, explains, Mercado Coin does not have a ballast, as it is not a stablecoin.
"Initially we will not list Mercado Coin on any external 'exchange'. It is a controlled launch. We have a centralized liquidity pool for the coin, with 'know your client' processes at every step," says Cohn. He explains that an initial batch was created and will be distributed as transactions happen on the platform and Mercado Livre does not influence the price.
"We don't release the initial batch now, it's not in our interest to do batch issues and that affects crypto. This will be directed to users as there is demand for cashback. The more it is sold in Mercado Livre Brazil, the more there will be distribution of Mercado Coin," he says.
Mercado Coin was developed with Ripio, a crypto as a service provider, which connects to the Mercado Pago environment, the financial service arm of Mercado Livre, and does the custody of this cryptocurrency. "It works as a 'white label' solution," Cohn says.
Currently, Mercado Pago, Mercado Livre's financial service, already transacts three cryptocurrencies Bitcoin (BTC), Ethereum (ETH) and Pax Dollar (USDP). "We already have 2 million users transacting cryptocurrencies within Mercado Pago," Yunes notes, stating that the company, being "innovative and cutting-edge should enter [the crypromo market]." The company is using the Ethereum blockchain to create the token, in the ERC20 standard.
Cohn also notes that although there is no regulation in Brazil for this type of asset, the company sought to adopt all the best practices already available, including those used in countries that regulate cryptocurrencies, as well as adopting extra security and data protection protocols in accordance with the General Data Protection Law.
The online retail platform Mercado Livre is today launching its own cryptocurrency, Mercado Coin, which will work as a kind of cashback to strengthen its loyalty program. With each purchase, customers will receive an amount of Mercado Coin that can be used for discounts on future purchases, accumulated in their profile, or exchanged for cash if the customer has a Mercado Pago account.
"We imagine a very large adhesion and engagement in our loyalty program," said earlier the president of Mercado Livre, Fernando Yunes. The launch takes place today for 500,000 people and will, by the end of August, be expanded to the entire customer base of Mercado Livre in Brazil. The currency does not expire and will only be for purchases, with no changes in the payment made by the platform to sellers.
In addition, as it can be used for discounts on purchases, the customer does not need to have a Mercado Pago account, unless he wants to sell the cryptocurrencies, which will be traded exclusively on this system. There is no set percentage of how many cryptocoins will be obtained with each purchase. This percentage will be defined according to the commercial management of the platform. For example, on special dates such as Mother's Day, Father's Day, or Black Friday, customers may get more Mercado Coins with each purchase.
In the future, according to the executive, the cryptocurrency may be taken to operations in other countries, but there is no timetable yet. The cryptocurrency may in the future transfer Mercado Coins to other cryptocurrency wallets, but there is also no estimate of when.
The coin launched today starts at $0.10, but its value will vary according to the supply and demand of this asset within the online retailer's ecosystem. As Guilherme Cohn, senior manager of corporate development at Mercado Livre, explains, Mercado Coin does not have a ballast, as it is not a stablecoin.
"Initially we will not list Mercado Coin on any external 'exchange'. It is a controlled launch. We have a centralized liquidity pool for the coin, with 'know your client' processes at every step," says Cohn. He explains that an initial batch was created and will be distributed as transactions happen on the platform and Mercado Livre does not influence the price.
"We don't release the initial batch now, it's not in our interest to do batch issues and that affects crypto. This will be directed to users as there is demand for cashback. The more it is sold in Mercado Livre Brazil, the more there will be distribution of Mercado Coin," he says.
Mercado Coin was developed with Ripio, a crypto as a service provider, which connects to the Mercado Pago environment, the financial service arm of Mercado Livre, and does the custody of this cryptocurrency. "It works as a 'white label' solution," Cohn says.
Currently, Mercado Pago, Mercado Livre's financial service, already transacts three cryptocurrencies Bitcoin (BTC), Ethereum (ETH) and Pax Dollar (USDP). "We already have 2 million users transacting cryptocurrencies within Mercado Pago," Yunes notes, stating that the company, being "innovative and cutting-edge should enter [the crypromo market]." The company is using the Ethereum blockchain to create the token, in the ERC20 standard.
Cohn also notes that although there is no regulation in Brazil for this type of asset, the company sought to adopt all the best practices already available, including those used in countries that regulate cryptocurrencies, as well as adopting extra security and data protection protocols in accordance with the General Data Protection Law.