This week's Latam Insights highlights three major storylines from Latin America: Brazil's central bank pushing Pix globalization despite US criticism, Mercado Libre terminating its crypto loyalty token, and Pix becoming a political battleground ahead of Brazil's presidential election.
Brazil Central Bank Advances International Pix, Defying U.S. Concerns
The Central Bank of Brazil has unveiled its next steps to enhance Pix, the ubiquitous instant payment system used by nearly all adults in the country. According to local media, the bank plans to launch International Pix, a standard feature enabling individuals and companies to complete cross-border payments and remittances using the Pix network. While Pix is already available in Argentina, the U.S., and Portugal on a limited basis, this new initiative aims to make it permanent, interlinking instant national payment systems and streamlining settlements. Pix already serves over 175 million users in Brazil and has processed nearly 200 billion transactions since its November 2020 launch.
However, the expansion faces headwinds. A recent report from the United States Trade Representative Office (USTR) raised concerns that the Central Bank of Brazil favors Pix, potentially disadvantaging U.S. electronic payment service providers like Visa and Mastercard. The report notes that industry representatives in the U.S. have expressed concern about the Central Bank requiring financial institutions with over 500,000 accounts to adopt Pix. Analysts warn that if Pix successfully goes global, it could upend the existing cross-border payment dominance of traditional giants.
Mercado Libre Ends Mercado Coin, Users Given Deadline to Convert
Latin American e-commerce giant Mercado Libre has notified users via its Mercado Pago digital wallet app and email that it will terminate the Mercado Coin program on April 17. Launched in August 2022 in Brazil, Mercado Coin was an ERC-20 token built on Ethereum in partnership with crypto exchange Ripio, initially priced at roughly $0.10. Users earned it as cashback on purchases through Mercado Libre's marketplace and could either spend it on the platform or cash it out. The intent was to bring everyday shoppers into crypto through a low-friction loyalty mechanism, but the token remained largely confined to the Mercado Libre ecosystem without meaningful external traction.
After April 17, users can no longer buy, sell, or earn Mercado Coin. Holders have three options: sell tokens through Mercado Pago, spend them on Mercado Libre purchases, or do nothing — any remaining balance will be automatically converted to local fiat currency (Brazilian reais for most users) and deposited into their Mercado Pago account. The company has not issued a public statement explaining the termination, but industry observers cite low liquidity, rising compliance costs, and strategic shifts as likely reasons.
Pix Becomes Key Issue in Brazil's Presidential Election
With over 175 million users, Pix has become a political flashpoint in Brazil as the country approaches its presidential elections. The USTR report has fueled debate: some Brazilian politicians defend Pix as a vital national financial infrastructure that should be protected from foreign pressure, while others advocate for more open competition. The system's ubiquity has made it a voter concern, and the election outcome could influence Pix's regulatory future and its international expansion trajectory. Both domestic parties and international stakeholders are closely watching how Brazil balances financial sovereignty with global integration.