On Thursday, Latin America’s largest cryptocurrency exchange, Mercado Bitcoin of Brazil, announced that it has received a new investment round of BRL 200 million (about $37 million). Led by Brazilian private equity firm GP Investimentos and early stage VC Parallax Ventures, the new funding round will help Mercado Bitcoin to scale across Latin America, and to invest in its Bitrust qualified custodian offering for large institutional investors, and its digital wallet product, Meubank.
According to the company, Mercado Bitcoin has more than doubled its customer base to 2.2 million accounts in the last two years. In 2020, BRL 10 billion ($1.2 billion) in cryptocurrency transactions were executed on its platform, and Mercado says that trading volume in January 2021 to date has already exceeded 50 percent of the entire volume of 2021. By year end, it hopes to have obtained 3 million live customer accounts.
“We want to develop the crypto ecosystem in Brazil and create a market as developed as that of the United States,” said Mercado Bitcoin CEO Reinaldo Rabelo. “To do this, we want to be one of the five largest digital exchanges in the world. Today, we are already the largest exchange in Latin America, operating almost exclusively in Brazil. Now, we’re going to look at the other markets, like Chile, Mexico and Argentina, which have a regulatory culture closer to ours. Our long-term purpose is to participate in the construction of a new infrastructure for the financial market, based on blockchain, smart contracts and crypto assets.”
Brazil: An interesting bitcoin test case
Brazil presents an intriguing test market for cryptocurrency market penetration. U.K.-based crypto startup Electroneum notes that Brazil—the world’s fifth-largest economy —is also the fifth largest holder of crypto ownership globally.
What’s more, Electroneum has found, while 25 percent of Brazil’s total population (212 million people) lives below the poverty line, workers earning less than minimum wage account for 40 percent of all crypto-holders in Brazil. Unlike in the U.S., for example, where nearly 80 percent of cryptocurrency buyers in 2020 were men with an average annual income of $130,000, Brazil’s largest segment of crypto adherents are the poor and unbanked.
In November, Mercado Bitcoin launched the world’s first token linked to soccer, the Vasco Token, in cooperation with Brazilian team Vasco da Gama. As Cointelegraph reported at the time the deal was announced, Mercado Bitcoin joined forces with the team to tokenize player selling rights under FIFA’s Solidarity Mechanism, a regulatory mechanism that stipulates that 5 percent of any mid-contract player transfer fee is to be paid as a “solidarity contribution” to each of the player’s training clubs.
Under the partnership, Vasco and Mercado Bitcoin “tokenized” this 5 percent solidarity fee through a 500,000 issuance, with token holders entitled to a share of the contract transfer fees of 12 players who were developed through Vasco da Gama’s youth teams and went on to successful professional careers in other markets.
Mercado Bitcoin said on Thursday that it is “in advanced talks” with several other clubs for similar token issuances of this kind, based on the FIFA solidarity mechanism.
Last week, MOSS, a startup founded in 2020 that is already billing itself as the world’s largest platform for trading carbon offsets (with an inventory of 2 million tons of carbon credits, equivalent to a market value of $36 million) and the first to tokenize tradable carbon credits, announced that effective this month, Mercado Bitcoin customers will be able to buy and offset carbon credits using MOSS’s carbon credit-backed token, MCO2. Mercado Bitcoin also plans to list the MCO2 carbon credit token on its own platform.
