MercadoLibre: Crypto Adoption In Argentina Increases Rapidly

The use of crypto assets in Argentina has experienced a significant spike. (Photo; Doc. MyDigitalMoney)

JAKARTA - MercadoLibre, Argentina's largest e-commerce platform, recorded a rapid increase in the use of cryptocurrencies among its customers. In its third quarter 2023 earnings report, the company revealed that the total crypto assets owned by its customers reached $21 million (Rp 333.39 billion) in September 2023, up from $15 million (Rp 238.28 billion) in December 2022.

This increase shows MercadoLibre's continued growth as a major player in the e-commerce industry, with annual revenues reaching $10 billion (Rp 158.85 trillion). In its Q3 earnings report, the company exceeded expectations with revenues of $3.8 billion (Rp 60.36 trillion) and profit of $685 million (Rp 10.87 trillion).

This growth was driven by the successful expansion of MercadoLibre in Brazil and Mexico. The company has also launched its own crypto asset, Mercado Coin, in Brazil. Although originally introduced at a price of 10 cents, Mercado Coin has experienced significant value growth in line with market dynamics.

Apart from Mercado Coin, Mercado Libre also started offering Bitcoin (BTC) and Ethereum (ETH) to its customers in December 2021. However, recent earnings reports do not provide specific details about the distribution of crypto assets among different digital currencies.

Crypto Market With Fast Growth

Argentina has become one of the fastest growing cryptocurrency markets. According to research by GWI, Argentina has one of the highest digital asset ownership rates of 23.5%, second after Turkey which reached 27.1%.

The increase in crypto adoption in Argentina was mainly driven by high inflation in the country. Argentina's inflation rate has exceeded 100% this year. According to state statistics agencies, inflation hit 102.5% in February, suggesting that the price of many consumer goods had more than doubled since 2022.

The Argentine government has historically taken a dynamic stance on cryptocurrencies. Despite warning users about the risks of digital assets in 2014, the government acknowledged the benefits of blockchain and cryptocurrencies in improving the economy in 2017.

The country's central bank also set regulations for crypto exchanges in 2019, requiring them to comply with anti-money laundering regulations and counter-terrorism financing. In the same year, the country banned cryptocurrency purchases from using credit cards as a partial measure to stabilize Argentine pesos.