Brazil’s Largest Digital Bank Nubank to Launch Its Own Cryptocurrency
On Wednesday, October 19, Nubank, the largest Brazilian digital bank by market value announced that it plans to launch its own cryptocurrency next year. Dubbed Nucoin, the cryptocurrency will be available to more than 70 million Nubank customers across three countries - Brazil, Colombia and Mexico.
As per the announcement, Nucoin will be available to customers in the first half of 2023. The company added that the cryptocurrency will be distributed freely and used to offer perks and discounts.
Furthermore, Nubank also said that the company touts Nucoin as “a new way to recognize customer loyalty and encourage engagement with Nubank products”. Speaking on the development, Fernando Czapski, general manager for Nucoin at Nubank, said: “The project is another step ahead in our belief in the transformative potential of blockchain technology and to democratize it even more, going beyond the purchase, sale and maintenance of cryptocurrencies in the Nu app. We are opening a door to the future. Nucoin is a new way to recognize customer loyalty and encourage engagement with Nubank products.
The Nucoin cryptocurrency will be built atop the Polygon blockchain network, the Layer-2 scalability platform for Ethereum. Polygon says that its blockchain network can easily support thousands of transactions per second.
The recent decision from Nubank comes while the broader crypto market is facing a larger meltdown. Prior to the launch of Nucoin next year, Nubank will 2,000 customers to take part in the forum to get their opinion and feedback. “In this phase, more than feedback, the proposal is to explore a decentralized process of product creation, characteristic of Web3,” Nubank said.
“This project is another step ahead in our belief in the transformative potential of blockchain technology and to democratize it even more, going beyond the purchase, sale and maintenance of cryptocurrencies in the Nu app,” said Czapski.
Note that Nubank isn’t the first bank to launch its native cryptocurrency. Previously, banking giant JPMorgan also launched its native cryptocurrency aka JPMCoin. It is a blockchain-based cryptocurrency which allows JPMorgan to facilitate instant cross-border settlements. The JPMCoin is pegged to the U.S. Dollar.
However, unlike JPMCoin, the Nucoin will trade based on supply-demand dynamics similar to Bitcoin and Ether. The Nucoin will trade on Nubank’s native crypto trading platform Nucripto platform, which offers trading for several other digital assets.
When asked whether Nubank has sought regulatory approval before launching its crypto, a spokesperson said: it “constantly evaluates the regulatory framework as an important part of our product development process”.
The interesting fact about Nubank is that it is backed by legendary investor Warren Buffett’s firm Berkshire Hathaway. After Nubank went public last year, Berkshire took a $500 million stake in Nubank in June 2021.