Brazil’s nubank to launch its own cryptocurrency

Nubank said Wednesday it will launch the token, called Nucoin, in the first half of 2023

The Brazilian digital banking startup Nubank will launch its own cryptocurrency in the country next year, marking the latest move into digital assets by a large financial institution.

Nubank said Wednesday it will launch the token, called Nucoin, in the first half of 2023. In a press release, the company touts Nucoin as ‘a new way to recognize customer loyalty and encourage engagement with Nubank products.’

Nubank said it plans to offer discounts and other perks to holders of the token.

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, Fernando Czapski, general manager for Nucoin at Nubank, said in a statement.

Nubank said it would invite 2,000 customers to take part in a forum group for guiding the development of Nucoin, ‘adhering to common practices in blockchain projects,’ according to the firm.

In this phase, more than feedback, the proposal is to explore a decentralized process of product creation, characteristic of Web3, Nubank said.

The cryptocurrency was built on the Polygon network, a so-called “Layer 2” protocol that aims to alleviate congestion on the Ethereum blockchain, where transactions can often be costly and take long to process. Polygon says its platform is able to support thousands of transactions per second.

The new token offering comes against a bleak backdrop for cryptocurrencies. The market is currently in a deep downturn investors are calling ‘crypto winter,’ with many digital coins — including the world’s largest, bitcoin — having lost over half of their value since the start of 2022.

Asked whether Nubank had sought regulatory approval in Brazil before launching its token, a spokesperson for the company said it ‘constantly evaluates the regulatory framework as an important part of our product development process.’