Stablecoin issuer Circle has announced it is teaming up with the Latin American fintech behemoth, MercadoPago, to offer USDC in Chile.
“Informed by MercadoPago’s broader plans in the region, Chile is our first flag thanks to its vibrant technological ecosystem,” Dante Disparte, Circle chief strategy officer and global policy head told Decrypt.
He said the launch is an “initiation,” into what Disparte considers a region that will be “one of the most important,” moving forward.
The launch is in line with what Circle CEO Jeremy Allaire has previously claimed, that 70% of USDC adoption comes from outside the United States.
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MercadoPago’s mobile app will allow users to purchase or sell USDC from as little as $0.05, or $50 Chilean pesos (CLP).
WIth over 64 million users according to its in-house 2022 Impact Report, MercadoPago is the financial branch of e-commerce giant, Mercado Libre. The latter has been called by some the Amazon of Latin America, amassing $10 billion worth of revenue last year. TK
Several of Chile’s domestic exchanges already support stablecoins such as USDC, although Circle’s announcement appears to be a push for more adoption.
“This is great news,” says Guillermo Torrealba, co-founder and CEO of Budapuntocom, the largest crypto exchange in Chile. The platform has been operational since 2015 and was the first to support USDC in the country.
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He told Decrypt that the fact MercadoPago—a company Torrealba considers “likely to be one of the most relevant for the industry moving forward”—is adopting crypto showcases that the technology is here to stay.
Although Chile is a country commercially known as a sort of testnet before expanding in the region, launching USDC through MercadoPago also reflects the current macroeconomic landscape.
In recent history, the nation has showcased low levels of inflation, floating around 2-3% during the past couple of decades. Covid-19 sparked a spike in prices, leading to double digit CPI reading last year, although the rate dropped to 6.5% last month.
“Circle’s outright backing of MercadoPago launching USDC is key for the Chilean market,” says Cristóbal Pereira, organizer of ETH Chile and Blockchain Summit Latam, one of the largest regional meetups for Web3.
Pereira, the CEO of Colledge, the largest Web3 educational platform in the country, told Decrypt that Chileans were leaning towards dollar denominated stablecoins already.
“Accessing dollars isn’t easy,” he said, adding that with MercadoPago being the largest fintech in the region, and in full growth in Chile, it “will become much easier.”
Thanks to this degree of penetration and MercadoPago’s credibility, Disparte told Decrypt that partnering with the Latin American fintech will allow the crypto economy to leave behind the idea of “fringe finance.”
“The Latin American end user won’t be subjected to internet funny money,” he said.
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Despite Circle’s excitement surrounding the partnership, USDC has been struggling to capture market share, hitting a two-year low in market capitalization.
Torrealba concluded that since “the bear market helps to filter who is here for the price and who is here for the technology,” Circle’s alliance with MercadoPago is more real than circumstantial.
