Only days after PayPal invested $750 million into MercadoLibre, it decided to ban all crypto listings. The e-commerce platform currently allows users to list items for sale in a number of cryptos, with XRP being the most popular. As of today, any listings in cryptos will be removed automatically and no more crypto listings will be permitted. MercadoLibre is one of the most popular e-commerce platforms in South America and crypto use is incredibly popular in these countries.
With the US imposing sanctions on Visa and MasterCard for operating in several countries where MercadoLibre operates, PayPal could have forced it to drop crypto payments in order to scoop up the extra transactions.
PayPal Joins the Anti-Crypto Bandwagon
This latest move from PayPal looks very much like it’s joining the anti-crypto bandwagon. Back in April 2018, Bill Harris – ex-PayPal CEO – slammed Bitcoin as a scam and a colossal pump and dump scheme. It’s not the first-time huge institutions have slammed Bitcoin, but it’s the first time a payment processor that’s actively working with crypto projects has spoken out against the digital currency domain. Earlier this year, Coinbase announced that users can deposit and cashout using PayPal, a huge move for the payment processor. However, this news from South America could hint that PayPal is preparing to remove itself from Coinbase in the coming months.
South America Loves Crypto
PayPal looks like it could have made a huge mistake forcing MercadoLibre to drop crypto payments, as cryptocurrencies are becoming more popular in South America. Last month, Paraguay paid Argentina in Bitcoin for an international trade deal, while Argentina’s public transport system started letting users top up their travel cards in Bitcoin. Elsewhere, Venezuela has turned to crypto as the only form of payment in the country after it entered hyperinflation – highlighting how important crypto is in South America.
Game Over for MercadoLibre?
It’s unlikely that the move will stop users from posting items on the e-commerce site, but there is a good chance that it will spur a new generation of competitors to emerge. If these other platforms lean towards crypto payments and offer juicy discounts, MercadoLibre could end up in real trouble.
South America is a hive of crypto activity, so this move to ban crypto ads looks rather silly. However, if PayPal is indeed behind the decision, then we could see PayPal pulling its services from other crypto related platforms around the world – not to mention the platforms it has a stake in.