Mercado Pago to Launch Crypto Services in Brazil Through Paxos
- The new feature, expected to launch by the end of December, will give Brazilian Mercado Pago users access to Bitcoin, Ethereum, and the Pax Dollar.
- Once the feature is launched, Brazilian users will be able to directly buy crypto using their existing account balance.
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The financial services arm of Mercado Libre, Mercado Pago, has partnered with Paxos to allow its Brazilian users to buy, sell, and hold crypto within its popular app, Paxos said in a blog post on 2 December.
According to the announcement, Mercado Pago will integrate Paxos’ blockchain infrastructure to give its Brazilian users access cryptocurrencies directly in the app they use to make payments and send fiat. The new feature will be rolled out by the end of December, and will initially support Bitcoin (BTC), Ethereum (ETH), and the Pax Dollar (USDP) stablecoin. The head of strategy for Paxos, Walter Hessert, said in a statement:
“This is a transformative moment for Latin America. Mercado Pago will be able to offer a seamless access to crypto and stablecoins for more than million Brazilians. This will accelerate mainstream adoption of cryptocurrency and stablecoins across the continent. We are thrilled to partner with Mercado Pago to make it possible.”
Once the feature has been launched, Mercado Pago users will be able to directly buy crypto using their existing balance of fiat, without the need of opening a separate account at another exchange. Paxos will be responsible for handling crypto trading and custody for the app in a similar way to how it does for payments giant PayPal, with which it partnered back in October 2020.
While Mercado Pago was initially launched to handle transactions from Mercado Libre — a popular website for buying and selling goods — it quickly outgrew its purpose and is now a payment system accepted in many stores. Even though Mercado Pago offers services in several countries in Latin America, it chose to launch the crypto functionality in Brazil first due to it being its largest market.
- PayPal USD (PYUSD) will be issued by Paxos and the Ethereum blockchain, and is backed by U.S. dollar deposits, short-term Treasuries, and similar cash equivalents.
- The company said the stablecoin can be redeemed for U.S. dollars at all times, and exchanged for any other crypto supported by the platform, including BTC, ETH, BCH, and LTC.
PayPal logo and sign in front of PayPal Holdings headquarters building in North San Jose Innovation District in Silicon Valley, San Jose, California, USA, 17 March, 2019. Michael Vi/Shutterstock
- Canadian customers who have no funds in their Paxos accounts will have their accounts automatically closed on 9 May, while the rest will be disabled on 2 June.
- Paxos is not the only company to be leaving Canada, with cryptocurrency exchanges dYdX and OKX saying they will wind down their businesses in the country due to “new regulations”.
- Both crypto exchange Coinbase and stablecoin issuer Paxos have stated that they will no longer accept or initiate U.S. dollar payments through Silvergate Bank.
- The two noted that cash transactions for institutional clients will now be carried out through their other banking partners, and that the move had no impact on pound and euro payments.