E-Commerce Titan Bans Crypto, Wiping Away Nearly 20,000 XRP, Bitcoin and Ethereum-Related Ads in Brazil
PayPal has invested $750 million in e-commerce giant Mercado Libre, Latin America’s most popular e-commerce site by number of visitors with 267.4 million users registered on the company’s marketplace, according to data compiled by Statista. Following the recent investment, Mercado Libre’s Brazilian website, Mercado Livre, has announced a ban on all crypto-related listings.
The ban will take effect on March 19, prohibiting users from engaging in any transactions involving cryptocurrencies, including pre-paid cards and cryptocurrencies used in games.
According to a survey conducted by Mercado Livre and Criptomoedas Fácil, Brazil has over 11,173 ads related to XRP, 5,638 ads related to Bitcoin and 2,636 related to Ethereum.
Transactions in the Mercado Libre electronic payment platform rose 70% in 2018, to 389 million transactions and 18,000 million dollars in total volume. Through Mercado Libre, PayPal will gain a massive foothold in the region’s rapidly growing electronic payments sector.
Founded in 1999 in Argentina and incorporated in the US, Mercado Libre hosts online auctions and operates an online marketplace in the following 18 countries, allowing users to purchase new and used products.
- Costa Rica
Prior to the PayPal investment, Mercado Libre partnered with Bitcoin wallet and merchant processor Ripio last year in an effort to expand crypto payment options for people interested in using Bitcoin.
PayPal is withstanding increasing competition from cryptocurrency payment platforms such as Square’s Cash App, which became the most downloaded payments app in the App Store and Play Store last December, surpassing PayPal’s Venmo.
The Latin American market will help position PayPal as a leader in the space.
Says PayPal president Dan Schulman,
“We’ve been impressed with the digital commerce and payments ecosystem Marcos Galperin [CEO of Mercado Libre] and his team have built. We see great opportunities to integrate our respective capabilities to create unique and valuable payment experiences for our combined 500 million customers throughout the region and around the world.”
The e-commerce company will raise $1.85 billion in equity offerings, including investments from PayPal and Dragoneer. Goldman Sachs, JP Morgan and Morgan Stanley are acting as joint bookrunners. According to the announcement,
“The company intends to use the proceeds to continue expanding its e-commerce platform, to strengthen its logistics infrastructure, and to invest in solutions that further solidify the company’s position as a powerful provider of inclusive end-to-end financial technology and payments solutions.”