Simply put
- Mercado Libre has ended its Mercado coin after four years of unsuccessful trials.
- The company’s new stablecoin takes the place of Mercadocoin’s loyalty token.
- Nubank’s Nucoin failure highlights a broader issue with reward tokens across the industry.
The major e-commerce platform in Latin America has quietly phased out its ERC-20 loyalty token, which was launched four years ago. Similarly, Nubank’s Nucoin has also faced a similar fate.
Mercado Libre has announced that the Mercado Coin will no longer be operational after April 17 through its Mercado Pago wallet. The firm, which surpasses Amazon in Latin America, shared the news without much fanfare.
For users holding these coins, there are three pathways forward. They can sell the coins within the app, use them as credit for purchases, or simply do nothing and allow the coins to be converted to local currency automatically. However, the company did not provide much detail about this decision.
Mercadocoin made its debut in Brazil in August 2022, developed as an ERC-20 token on Ethereum in partnership with Lipio. The concept was straightforward: buy selected items on the marketplace, earn tokens, and then either use them for future purchases or cash them in. Yet, the concept never gained traction.
The token was introduced in Brazil and later expanded into other markets, but it failed to establish a solid user base. It turned out to be more of a curiosity, a complex loyalty program that didn’t really work.
This might explain why Mercado Libre isn’t completely abandoning the crypto scene; rather, it’s shifting its focus to different types of cryptocurrencies.
In August 2024, the company is set to introduce MeliDolar (MUSD), a stablecoin tied to the US dollar. Also created in collaboration with Lipio, it will be accessible via Mercado Pago. Unlike its predecessor, MeliDolar maintains a stable price, resting on US Treasury bills and dollar deposits.
MeliDolar will also serve as the basis for the Meli Plus loyalty program, where users can earn cash back on purchases. They have the option to use it on the platform, trade it within the app at no charge, or hold it as a safeguard against currency fluctuations—a particularly valuable option for consumers in Brazil and Mexico facing depreciating currencies.
This decision seems logical after a straightforward experiment with Paxos’ Stablecoin.
Mercado Libre isn’t alone in facing these challenges. Nubank, Brazil’s largest digital bank, with over 100 million customers, had been running a similar experiment. Nucoin launched on Polygon in 2023 and was distributed to a wide user base as a rewards token.
However, its value has since plummeted by 97%. Nubank halted trading in September 2024, allowing coin holders 90 days to exchange their tokens for Bitcoin or USDC, with the platform shutting down completely by December. The 16 million users mostly benefited from promotional campaigns instead.
Despite this, Mercado Libre still retains over $38 million in Bitcoin and is committed to facilitating cryptocurrency trading and stablecoin transfers through Mercado Pago. The infrastructure will remain, but the coins that saw little usage will fade away.
