Nubank, a top fintech bank in Latin America, has announced that it will soon launch its cryptocurrency in Brazil by next year. The financial institution stated that the cryptocurrency dubbed Nucoin will roll out in the first half of 2023.
According to a press release published by CNBC, Nubank described Nucoin as an instrument it intends to use to recognize customers’ loyalty, thus, increasing their engagement with the bank’s products and services, the announcement adds.
Commenting 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.”
Nubank’s cryptocurrency is being developed by multiple parties, including some customers from the bank. Per the announcement, 2,000 customers from the bank will be invited to participate in a forum that is essentially created for the development of Nucoin.
Nubank noted that its upcoming cryptocurrency would comply with existing anti-money laundering practices.
Nucoin is built on Polygon, a layer-2 scaling Ethereum scaling solution. The cryptocurrency’s value will be determined by the forces of demand and supply, just like other top crypto assets, including Bitcoin, Ethereum, and Matic.
Banks Foray Into the Crypto Space
The announcement marks the latest entrance of traditional financial institutions into the cryptocurrency industry. The development is not the first time a bank will launch a digital currency. In 2020, American multinational bank JPMorgan Chase launched its stablecoin dubbed JPMCoin.
Aside from launching cryptocurrencies, several traditional financial institutions are heavily linked to the world of cryptos.
While banks are trooping into the crypto sector, global regulators are still skeptical about the emerging assets as they continue establishing policies that will safeguard the existing financial system.
Based on regulators’ scrutiny of crypto offerings, CNBC asked a spokesperson for Nubank whether the bank had received regulatory clearance before developing Nucoin.
“… we constantly evaluate the regulatory framework as an important part of our product development process,” a spokesperson for Nubank told CNBC.
Nubank’s Dominance in Latin America
Launched in 2013, Nubank is a fintech bank headquartered in São Paulo, Brazil. As of last year, Nubank has a total of 6,068 employees hired to serve over 70 million customers in Brazil, Mexico, and Colombia.
Some of Nubank’s investors include Warren Buffett’s Berkshire Hathaway, which invested $500 million in the bank. Nubank is currently valued at $20.4 billion in the stock market.
