Buffett-backed digital bank Nubank to launch its own cryptocurrency in Brazil

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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.

Nubank isn't the first bank to launch its own cryptocurrency. JPMorgan rolled out its own token, JPMCoin, a so-called stablecoin that maintains a one-to-one peg to the U.S. dollar. Unlike that coin, Nucoin's price fluctuates in value based on supply and demand, similar to coins like bitcoin and ether.

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