The CEO of Mercado Libre believes that Bitcoin will not become legal tender. The Argentine businessman predicts a strengthening of payment systems with fiat currencies.
In recent days, the co-founder and CEO of Mercado Libre and Mercado Pago, Marcos Galperin, commented on Bitcoin and other cryptocurrencies. He believes that the function of these assets is to operate similarly to gold and serve as a store of value.
Many people in Latin America use the e-commerce platform that Galperin runs. He recently talked online with PayPal president Dan Schulman about digitizing payment systems.
Schulman asked the Argentine businessman about his opinion on digital currencies. Without mentioning Bitcoin, the CEO of PayPal recalled the current interest from many central banks in issuing this type of currency. Marcos Galperin’s reply focused on comparing cryptocurrencies to gold.
“Cryptocurrencies are a great substitute for gold,” said Galperin. He highlighted that the difficulties of cryptocurrencies to scale create obstacles in transactions. For that reason, he does not think that they are viable as a payment method. Besides, he considers that the process of scaling would entail a very high energy cost, which he does not find convenient in the current ecological environment.
Marcos Galperin also raised the issue of the decentralization of cryptocurrencies, citing it as a prominent feature. However, he said that this causes governments to lose power, so “cryptocurrencies are not very likely to become legal tender.” On the contrary, he predicted that fiat currencies will strengthen digital payment systems.
Coronavirus Expansion and Electronic Commerce Boom
The beginnings of electronic commerce at the end of the 20th century and its current growth from the expansion of the coronavirus were other topics that the leaders of PayPal and Mercado Libre discussed. In this regard, Schulman asked Galperin about his experience on the Mercado Libre platform amid lockdown due to the pandemic.
During a drop in the use of cash for fear of contracting coronavirus, Galperin confirms the rise of electronic payments. He noted that the trade of products on Mercado Libre, in Latin America, has been between USD 15,000 million and USD 20,000 million so far in 2020.
According to the Argentine businessman, the payment system has grown about three times, processing payments between USD 45,000 million and USD 60,000 million, with around 100 million people making online purchases in Latin America. In this way, the platform’s buyers have valued digital purchases more in this time, paying loans on time through the Mercado Pago system.
The mission of this e-commerce platform is to help eliminate cash handling in Latin America. This “has accelerated with the pandemic and will increase in the coming years,” according to Galperin. For him, this fact is very useful in the countries of the region since there are many unbanked people, and many economies suffer the onslaught of inflation.
This conversation took place after PayPal’s recent announcement to allow the sale of Bitcoin and other cryptocurrencies, initially in the United States. At the beginning of next year, the customers of this digital payment platform may be able to make payments in cryptocurrencies in around 26 million businesses around the world.
By Willmen Blanco
