Mass adoption looms as South America’s second-largest company accepts crypto payments

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On April 28, MercadoLibre (MELI), Latin America’s largest online marketplace, launched a real estate section dedicated to cryptocurrencies. Although the company does not arrange real estate directly, it justifies the category as a payment system.

The $ 81 billion retailer is the second largest company in South America and is present in 18 countries, including its three largest markets, Brazil, Argentina and Mexico.

The group also owns Mercado Pago, a digital payment system for online and offline transactions, along with Mercado Envios, a logistics platform that provides fulfillment, storage and shipping services.

Current offerings include houses, condominiums, vacant land, land and commercial real estate located in Buenos Aires, Santa Fe and Cordoba.

A new use case for cryptocurrency in South America

Although this might seem like a niche market, more than 300 real estate agents participated in the Mercado Libre website, which explained the basic mechanics of cryptocurrencies and their potential impact on the sector. The news may have had less of an impact, as fewer than 90 bids were in the section, and prices continue to appear in U.S. dollars.

As is already the case with properties paid in US dollars, Argentine pesos or Brazilian reals, the transaction is handled outside the Mercado Libre platform and combined between the parties. Thus, having selected the preferred property, the buyer contacts the real estate agent and asks to carry out the transaction in cryptocurrency at the closing rate.

However, what analysts may not have anticipated is the potential for Bitcoin (BTC), Ether (ETH) and Tether (USDT) to effectively function as an exchange medium in Argentina.

As Juan Manuel Carretero, the commercial manager for vehicles and real estate at Mercado Libre, said:

“Surely, as cryptocurrencies spread, it will no longer be a separate section, but a payment-option filter like any other.”

According to Statista, the gross volume of Mercado Libre goods represents 25.4% of all e-commerce sales in Latin America. Its sales are expected to be $ 25 billion in 2021. Therefore, capture 5% of the $ 1.25 billion in volume generated annually.

Countries with inflation problems could lead adoption of cryptocurrency

Argentina may end up in charge of adopting cryptocurrency as the country’s gross domestic product declined by 10% in 2020, and its cumulative inflation has reached 42.6% over the past 12 months.

Considering that people have limited themselves to buying $ 200 of foreign banknotes a month from the central bank, cryptocurrencies effectively serve as a storehouse of wealth for its citizens.

Maybe it’s just a matter of time before it lasts as long as a cryptocurrency gets a central stage as one of the top digital payment options and marketplaces in Latin America. Meanwhile, the dedicated real estate section should be interpreted as a test drive for consumer demand.

The views and opinions expressed here are only those of the author and does not necessarily reflect the views of Cointelegraph. Every investment and business move involves risk. You have to do your own research when you decide.