Brazilian neobank Nubank launches its own cryptocurrency

Nubank is creating a cryptocurrency for customers as part of a loyalty program, with plans to launch the tokens in the first half of 2023, the neobank announced Wednesday.

The Sao Paulo-based fintech created Nucoin and its rewards program in partnership with Polygon Technology, which has developed a platform designed to scale Ethereum-based products. Nubank's tokens will be available at no cost to all customers next year as the basis for a rewards program in Brazil, the company said. In its announcement, the company said its goal is for customers to earn benefits and perks as they accumulate Nucoin.

Nubank, which has more than 70 million customers across Brazil, Mexico and Colombia, will invite about 2,000 of the company's most engaged and active customers in October and November to participate in the use of Nucoin, solicit feedback and "explore a decentralized process of product creation, characteristic of Web3."  

"Nucoin is a new way to recognize customer loyalty and encourage engagement with Nubank products," Fernando Czapski, general manager for Nucoin at Nubank, said in a prepared statement. "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."

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Nubank will use Polygon's technology, which handles transactions on a separate Ethereum-compatible blockchain and then returns transactions to the Ethereum blockchain after processing, as it evolves and expands the cryptocurrency. 

This isn't Nubank's first foray into crypto. This summer, the platform began allowing customers to trade bitcoin and ether through Paxos's blockchain infrastructure, and hit 1 million users within a month of launching. Nubank's development of its own currency comes on the heels of the "crypto winter," which has steamrolled cryptocurrency values. Bitcoin and ether values have been slashed by more than 60% in the last year.

The neobank's own value has declined more than 60% since listing on the New York Stock Exchange last December and marking one of the largest initial public offerings of the year. On Wednesday, the Warren Buffett-backed Nubank had a roughly $20 billion market capitalization.

Nubank's announcement follows the rollout of a similar program from the Latin American e-commerce giant MercadoLibre. In August, the company announced the creation of MercadoCoin, its own cryptocurrency and customer loyalty program. Clients can earn the currency when buying products on MercadoLibre's platform and can use it to make new purchases.