USDC Gains Support in Latin America with the “Amazon of LATAM”
Crypto continues to grow in South America | Credit: Shutterstock
Key Takeaways
- Circle announces its new partnership with Mercado Pago.
- Mercado Pago is Latin America’s biggest Fintech.
- Circle CEO says “~70% of USDC adoption was non-US.”
- Large part of adoption driven by emerging markets.
USDC issuer Circle announced its partnership with Mercado Pago, Latin America’s biggest Fintech firm, a subsidiary of Mercado Libre. Circle CEO, Jeremy Allaire, announced the partnership on Twitter, calling Mercado Libre “the Amazon of LATAM”.
The partnership kicks off the start of its operations in Chile, with plans to expand across Latin America.
Allaire commented on stablecoins, which tie their value to the US dollar, noting that non-US markets dominate the adoption of US stablecoins.
USDC’s LATAM Market
“Latin America is emerging into an epicenter for the digital economy with flourishing innovation and enthusiasm about digital dollars,” said Rachel Mayer, VP of Product at Circle in the company’s announcement .
“Working with Mercado Pago to offer USDC to Chile users is a pivotal step in providing more accessible digital financial solutions to enable global participation in this new era of finance.”
Matías Spagui, Senior Director of Mercado Pago also reported “The US dollar is one of the most stable currencies in the world and a simple vehicle to ensure wealth preservation amidst general uncertainty.
“With the launch of this stablecoin we seek to diversify access to cryptocurrencies and offer the more than two million Mercado Pago users an alternative that matches the value of the dollar.”
State Of Stablecoins In the U.S
In a blog post on “Stablecoins power financial interoperability” ,Circle discussed the potential of stablecoin adoption in payment solutions on both institutional and individual levels.
“We think that in the coming years, millions of businesses and billions of people will turn to new, regulated, blockchain-based financial services that will compete with traditional financial institutions for savings, payments, credit and more.
“Given advances in software development that make it easier to build with and use the blockchain, it will be easy for developers to embed these services in a way that’s invisible to merchants and their users,” reads the blog post.
“We see striking parallels between where this “internet of money” is today and the original internet as it took shape during the 1990s. The original internet was born in the 1960s, yet it didn’t reach escape velocity until browsers became widely available and easy to use for mass audiences.
“This breakthrough enabled the creation of the cornerstones of the internet economy — search, social media, eCommerce and more — that fully disrupted and revolutionized many trillion-dollar industries.
A similar evolution is occurring now. Digital currency and blockchains are progressing from their early stages, enhancing user experience and blockchain efficiency.
This mindset drove Circle to integrate USDC into diverse payment solutions, exemplified by its success integrating USDC on Solana Pay within Shopify.
Josh Fried, business development and partnerships director at Solana Foundation says “You need speed at the point of sale for merchant payments. No one wants to sit on a website to wait for wallet transactions. Similarly in a point of sale in a store, can you imagine waiting three minutes for your payment to go through? No one wants to do that.”
Yet legislatively, there’s less foresight. Currently, Congressional members differ on stablecoins’ relevance and stability.
The same Congress members are arguing against the US Securities and Exchange Commission (SEC)’s stance on Stablecoins.
While there have been rumors of the SEC planning on cracking down on stablecoins such as USDT and USDC, congress members are already apprehensive about PayPal’s introduction of its own stablecoin PYUSD.
Congresswoman Maxine Waters said “Given PayPal’s size and reach, Federal oversight and enforcement of its stablecoin operations is essential in order to guarantee consumer protections and alleviate financial stability concerns.
Without legislation on the books that establish clear and strong consumer protections at the Federal level, consumers are at greater risk of harm at the hands of bad actors.”
On the other hand, the Chairman of the House Financial Services Committee, Patrick McHenry showed his support for PYUSD and stablecoins.
In a statement , he said: “This announcement is a clear signal that stablecoins-if issued under a clear regulatory framework-hold, promise as a pillar of our 21st-century payments system. Clear regulations and robust consumer protections are essential to enabling stablecoins to achieve their full potential.“
“We are currently at a crossroads to keep America at the forefront of digital asset innovation. Congress is making significant, bipartisan progress on legislation to ensure the U.S. leads the financial system of the future. We must finish the job.”
