On April 28, MercadoLibre (MELI), the largest online marketplace in Latin America, launched a real estate division dedicated to cryptocurrencies. Although the company does not settle real estate transactions directly, it legitimizes this category as a payment system.

The $ 81 billion retailer is the second largest in South America and is located in 18 countries, including the three largest markets: Brazil, Argentina and Mexico.

The group also owns Mercado Pago, a digital payment system for online and offline transactions, and Mercado Envios, a logistics platform that offers fulfillment, warehousing and delivery services.

Current offers include homes, apartments, plots of land, plots and commercial properties in Buenos Aires, Santa Fe and Cordoba.

New use case for cryptocurrencies in South America
While this may seem like a niche market, over 300 real estate agents attended the Mercado Libre webinar to explain the underlying mechanisms of cryptocurrencies and their potential impact on the sector. The news may have little impact since there are fewer than 90 bids in the section, and prices are still quoted in USD.

As with property paid in US dollars, Argentine pesos or Brazilian reais, the transaction takes place outside the Mercado Libre platform and is collected between the two parties. Thus, after selecting the preferred property, the buyer contacts the real estate agent and requests a cryptocurrency transaction at the closing exchange rate.

However, analysts may not have been able to predict that Bitcoin (BTC), Ether (ETH) and Tether (USDT) could effectively serve as a medium of exchange in Argentina.

As Juan Manuel Carretero, Commercial Director of the Vehicle and Real Estate Department at Mercado Libre, stated:

“ Probably when cryptocurrencies become so ubiquitous that it will not be a separate entity, but rather a candidate for a payment method like everyone else.
According to Statista, total sales of Mercado Libre account for 25.4% of all e-commerce sales in Latin America. Sales are expected to reach $ 25 billion in 2021. Consequently, it represents 5% of the $ 1.25 billion generated annually.

Countries with inflation problems can lead to the adoption of cryptocurrency
Argentina could become a model for cryptoadoption as the country’s GDP fell by 10% in 2020 and cumulative inflation in the last 12 months was 42.6%.

Given that people have limited themselves to the central bank’s purchases of $ 200 a month in foreign banknotes, cryptocurrencies effectively serve as a fortune for their citizens.

How long it will take for cryptocurrencies to be at the center as one of the leading options and markets for digital payments in Latin America can only be a matter of time. In the meantime, the section on real estate should be interpreted as a test drive of consumer demand.