Nubank Stops Nucoin Crypto Trading, Here's Why!

Nubank stop trading crypto Nucoin (Photo; Doc. The Crypto Currency Post)

JAKARTA - Nubank, Brazil's largest fintech bank, recently announced the termination of its flagship crypto trading, Nucoin. This step was taken as an effort to protect users from potential market volatility which could have a negative impact. This discontinuation adds to the spotlight on bank financial conditions, amid growing concerns about the quality of assets and non-performing loans.

In a blog post on September 10, Nubank revealed that Nucoin can no longer be traded on their app. This crypto was first launched at the end of 2022 on the Polygon blockchain, as part of an award program for customers, offering various advantages.

Now, Nucoin will only serve as an asset used to unlock various benefits in the Nubank ecosystem. This includes discounts on Nubank Shopping and access to exclusive experiences offered by banks.

Quoted from Crypto Potato, in its official announcement, Nubank said "We have decided to immediately stop trading to avoid potential Nucoin value fluctuations in the market."

Even so, customers still have the opportunity to exchange their Nucoin for Bitcoin or USDC (digital dollar) until December 9, 2024. Nubank also offered lottery prizes for a total of up to 1 million Rand South Africa (around IDR 860 million) for those exchanging their coins.

Although the exact reason is not yet entirely clear, this sudden decision comes amid the spotlight on Nubank's financial stability. Several analysts have highlighted the increase in the number of problematic loans and the decline in asset quality as a factor to watch out for.

A report from Bloomberg states that although Nubank's shares have soared more than 60% this year, there are concerns that the bank's valuation is overestimated. Traffic loans that have passed due more than 90 days hit a 7% record in the second quarter, far exceeding the industry's average of 5.5%.

On the other hand, bank reserves to cover potential losses from bad credit actually fell from 831 million US Dollars (approximately IDR 12.8 trillion) to 760 million US Dollars (approximately IDR 11.7 trillion).