MercadoLibre's fintech launches its own dollar-backed 'stablecoin' in Brazil

SAO PAULO (Reuters) - Latin American e-commerce giant MercadoLibre's financial technology arm Mercado Pago announced on Wednesday that it has started making a so-called stablecoin priced in U.S. dollars at a one-to-one value available to its clients in Brazil.

The South American economy is the largest market for MercadoLibre.

The stablecoin, called Meli Dolar, can be traded by all Mercado Pago clients in Brazil through the fintech's app, the company said in a statement.

Stablecoin is a type of cryptocurrency that is pegged to a stable asset as a way to reduce volatility.

Mercado Pago, which operates as a digital bank and a payment services provider, said the stablecoin launch adds a new crypto product to its portfolio, as it already offers the possibility to trade crypto assets such as bitcoin and ether.

In 2022, MercadoLibre also launched in Brazil a cryptocurrency called MercadoCoin as part of its loyalty program.

Mercado Pago added that it will not charge fees to clients to access Meli Dolar trades.

The statement said crypto asset platform Ripio will operate as an exchange and market maker for the Meli Dolar transactions with Mercado Pago.

(Reporting by Andre Romani; editing by Jonathan Oatis)