- It is not known why the Latin American retail company decided to ban crypto-related listings
- MercadoLibre recently received $750 million from payments processing giant PayPal
- The Argentine e-commerce platform made the announcement on Sunday, reports say
Latin American e-commerce giant MercadoLibre is dumping cryptocurrency-related listings, a development that got experts thinking that it might be related to PayPal’s investment in the firm. The company recently released warnings to users that said listings will be banned from the MercadoLibre platform. Reports indicate that the popular e-commerce site made the announcement days after scoring a whopping $750 million investment from PayPal.
The payments processing leader has been making it possible for its users to transfer money internationally through its online platform. While the firm’s overseas transfer rates are affordable, the company has been encouraged by blockchain experts to integrate the technology into their system. PayPal has not made a comment regarding this.
The online retailer’s decision to ban crypto listings came at the same time that it started its crackdown on prepaid cards and tokens used for gaming. The measure, according to the company, will take effect starting 19 March.
In an email sent to vendors, the online retail giant said that it will drop the ads on this date. In Brazil alone, over 9,000 cryptocurrency and 5,000 bitcoin ads are online. Ripple’s XRP appears in over 11,000 ads, a Criptomoedas Fácil report notes.
Back in 2018, Bitcoin wallet brand Ripio entered an agreement with MercadoLibre to allow Ripio users to withdraw funds in Bitcoin. It is not known if the partnership has already been terminated. It is unclear why the brand is dropping crypto listings, but platforms that have dropped the same listings pointed out problems relating to fraud, user security and potential illicit activities. It is also not clear if PayPal had something to do with the ban, but experts claim that the American company may have had an agreement with MercadoLibre regarding this particular matter. Experts have noted before that blockchain is potentially disruptive to PayPal’s business model.
MercadoLibre stocks have gone up in the past few months despite the Brazilian entry of American retail giant Amazon. The latest jump was due to PayPal’s investment. It is noted by observers in Argentina that MercadoLibre raised over $1 billion for its own payment solutions brand and its logistics.
A Bloomberg report says that the firm raised the amount through direct investments and a public share offering.
“This deal opens the door to communication channels between our operations teams. We’re going to identify collaboration areas, to understand how PayPal’s global know-how best complements MercadoLibre’s regional know-how”, MercadoLibre chief marketing officer Sean Summers said. Summers claimed that investors know that e-commerce in Latin America will grow more in the coming years. Reports say that the funds from PayPal will be used for e-commerce and fintech in the firm’s largest markets. This includes Argentina, its home country, as well as Brazil and Mexico.
PayPal will not be joining MercadoLibre’s board, the company has said.
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