South American e-commerce giant MercadoLibre Inc announced Thursday at a press conference that it will create a new cryptocurrency as part of its loyalty program.
MercadoLibre MELI.O said in a press conference that customers will earn MercadoCoins by purchasing products on the e-commerce platform.
They will then be able to use the digital currency, which follows Ethereum’s ERC-20 token standard, for new purchases or trade it at the company’s financial services unit, MercadoPago.
The announcement comes at a time when competition in Brazilian e-commerce is increasing. Sea Ltd’s Shopee has reported a 270% revenue increase in the country in the second quarter and China’s AliExpress is also gaining ground.
It also comes after a slump in the cryptocurrency markets this year. MercadoLibre’s country leader, Fernando Yunes, said the company was focusing on long-term opportunities rather than short-term market movements.
The MercadoLibre cryptocurrency will have an initial value of 0.10 dollars per unit and will be open to market fluctuations.
MercadoCoin will be available to 500,000 customers in Brazil starting Thursday and is expected to reach the company’s total 80 million user base in the country by the end of August.
The company said it did not yet know when MercadoCoin would expand to other Latin American countries and that, for now, the digital currency will not be traded on platforms other than MercadoPago.