Brazilian bank Nubank introduces Bitcoin and Ether trading
Brazil's largest digital bank, Nubank, will offer low-cost cryptocurrency trading to its clients
By Shashank Bhardwaj
Nubank, the largest Brazilian digital bank, announced on Wednesday that it's users will be able to purchase and sell Bitcoin (BTC) and Ether (ETH) on its platform. Nubank's parent business, Nu Holdings, said that it would allocate around 1% of its cash on its balance sheet to Bitcoin to express its confidence in the cryptocurrency. Paxos' blockchain infrastructure will supply the crypto trading and custody service.
According to Paxos, the product will be gradually made available to Nubank users in Brazil to reach all of its customers by the end of July. In terms of future cryptocurrency availability, the company "will do frequent curation to add more."
The users will be able to purchase and sell crypto with Brazilian reals but will not be able to withdraw or deposit crypto at first, Paxos said on Thursday.
Brazil has been witnessing a significant increase in cryptocurrency usage. According to the Brazilian tax authority Receita Federal, Brazilians transacted $11.4 billion in stablecoins between January and November 2021, which is nearly thrice the amount traded in 2020.
As per the company's website, Nubank previously enabled its users to invest in crypto only through exchange-traded funds that were available through its investment unit, NuInvest.
Nubank CEO and co-founder David Vélez was quoted saying that they have been keeping a close eye on the growing trend of cryptocurrency adoption in Latin America and believe that there will be a transformational impact on the region. However, the customers are still skeptical due to the lack of available information or just can't keep up with the complex experiences.
According to Nubank's 2021 annual report, they have 53.9 million subscribers in Brazil, Mexico, and Colombia. The bank made $1.7 billion in revenue last year. The bank made $1.7 billion in revenue last year.
Nu Holdings went public in December with an initial valuation of $41.5 billion, making it one of Brazil's leading companies by market value; however, its market capitalization has subsequently dropped to roughly $17.4 billion. Despite CEO Warren Buffett's notable criticism of bitcoin and cryptocurrencies in general, Berkshire Hathaway held more than $1 billion worth of shares in the company as of February.
Mercado Pago, the digital wallet of Mercado Libre and Paxos teamed together in December to allow its Brazilian users to purchase and sell bitcoin, ether, and the stablecoin Pax dollar (USDP). Charles Cascarilla, co-founder and CEO of Paxos, was quoted saying, “Nubank’s move to enter the crypto trading space represents a strategic move not only for the company but for an acceleration of the cryptocurrency adoption in the region.”
Shashank is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash
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