Mercado Libre, a prominent player in Latin America’s e-commerce space, has made the decision to discontinue Mercado Coin, its loyalty token, following a lackluster four-year run. The token will cease operations on April 17, with users initially given three options: to sell their tokens directly through the app, utilize them as purchase credit on the platform, or do nothing and wait for automatic conversion into local fiat currency.
Although the announcement was brief and provided minimal context, it marks the end of an experiment that began with the token’s launch in August 2022. Designed as an ERC-20 token on the Ethereum blockchain in collaboration with crypto exchange Ripio, Mercado Coin aimed to encourage user engagement by rewarding purchases with tokens that could later be redeemed for products on the platform. However, the scheme failed to gain traction and ultimately did not establish a significant user base, leading to its classification as a curiosity rather than an effective loyalty program.
In contrast, Mercado Libre is not completely retreating from the cryptocurrency landscape. In August 2024, the company introduced MeliDolar (MUSD), a stablecoin pegged to the U.S. dollar. Like its predecessor, MeliDolar was developed in partnership with Ripio and is available through the Mercado Pago platform. Its stability is attributed to being backed by U.S. Treasury securities and dollar deposits, providing reassurance in a fluctuating market.
MeliDolar also serves as a pivotal component of the Meli Plus loyalty program, where members can receive cashback on their purchases. Users can either spend their MUSD, sell it within the app without incurring fees, or hold it as a hedge against their local currency’s volatility—a feature particularly valuable for consumers in Brazil and Mexico facing diminishing currency value.
Mercado Libre’s transition to MeliDolar follows a broader trend noticed within the fintech and cryptocurrency space, as others struggle with similar experiments. Notably, Nubank, Brazil’s largest digital bank, also ventured into the rewards token space with its Nucoin, which collapsed substantially in value. Launched in 2023 on the Polygon blockchain, Nucoin was given to Nubank’s extensive user base but ultimately lost 97% of its value. By September 2024, Nubank halted trading and provided a 90-day window for holders to convert their coins into Bitcoin or USDC before fully discontinuing the token by December, leaving millions of users dissatisfied.
In the wake of discontinuing Mercado Coin, Mercado Libre maintains a healthy reserve of over $38 million in Bitcoin and continues to facilitate crypto trading and stablecoin transfers through Mercado Pago. While the company is refraining from further investment in volatile tokens, it aims to leverage its existing crypto infrastructure for more stable financial products moving forward.
