HomeCryptoBuffett-backed Brazilian Digital Bank to Launch Its Own Cryptocurrency

Buffett-backed Brazilian Digital Bank to Launch Its Own Cryptocurrency

Photo by Pierre Borthiry – Peiobty on Unsplash

CRYPTOCURRENCY — As the global economy continues its grim downward trajectory, crypto has been one of the biggest asset classes to suffer. Based on recent market data, crypto’s benchmark coin — Bitcoin (BTC), has plunged roughly 60 percent since the beginning of the year — an astonishing decline in only roughly ten months. For reference, the S&P 500 declined about 22% in the same period, a sharp contrast demonstrating the higher volatility and risk factor for crypto compared to stocks.

Where Two Opposing Sides Intersect

Interestingly, a surprising convergence between the two markets just transpired, with an unexpectedly prominent name that has been one of the most vocal opposition of crypto as a fundamentally-sound investment on the same team. We are, of course, referring to what many consider to be the greatest investor of all time, Warren Buffet, who, at one point, when asked whether he would consider investing in the space, answered with no hesitation:

“If you owned all of the bitcoin in the world and you offered it to me for $25, I wouldn’t take it. Because what would I do with it? I’ll have to sell it back to you one way or another. It isn’t going to do anything.”

However, it seems like, despite his personal dislike of the industry, with his many investments (and sub-investments), one of them is bound to go against his wishes in a bid to boost its earnings potential, which ironically, if it works, will make Buffet a tiny bit richer.

Nubank’s Nucoin: A Brazilian Digital Bank’s Gamble

On Wednesday, Nubank, the largest fintech bank in Latin America and one of the investments under Berkshire Hathaway’s portfolio, expressed its plan to venture into its own cryptocurrency next year. According to the company, the token, which is dubbed “Nucoin,” will symbolize “a new way to recognize customer loyalty and encourage engagement with Nubank products,” the bank told in a press release.

“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 the company statement.

“This project is another step ahead in our belief in the transformative potential of blockchain technology and to democratize it even more.” The company added, “In this phase, more than feedback, the proposal is to explore a decentralized process of product creation, characteristic of Web3.”

Meanwhile, because of the crypto regulation echoes, when asked whether Nubank had pursued regulatory approval in Brazil prior to launching its token, the company spokesperson vaguely answered, “We constantly evaluate the regulatory framework as an important part of our product development process.”

Nubank boasts renowned investor Warren Buffett among its list of prominent financial backers. Buffett’s company, Berkshire Hathaway, took an eye-watering $500 million stake in Nubank in its pre-public offering in June 2021. Currently, the stock market values the company at $20.4 billion, around half what was valued in its Initial Public Offering (IPO) in December of last year.

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