Nu Holdings Ltd., a Brazilian virtual bank supported by Warren Buffett's Berkshire Hathaway Inc., has teamed up with blockchain startup Paxos Trust Co. to offer cryptocurrency trading to its consumers.
According to Paxos Chief Executive Michael Coscetta, Nubank's more than 50 million users will be able to exchange Bitcoin and Ethereum starting on Wednesday.
Paxos has witnessed an increase in demand for digital currencies in Brazil and believes that the decision will promote financial inclusion for Nubank clients by providing them with more payment options.
In an interview, Coscetta remarked, "You are seeing a lot more enthusiasm to join [in cryptocurrency] not only in Brazil but throughout Latin America."
Nubank said in a statement that it will gradually offer a cryptocurrency exchange to its full customer base by the end of June.
Nu Holdings also buys Bitcoin in the amount of up to 1% of its cash on hand, according to the same statement, without specifying a specific sum.
Crypto firms have been focusing on Latin America. Before the deal fell through, Coinbase Global Inc. planned to buy Brazilian crypto brokerage 2TM Participacoes SA.
The U.S. cryptocurrency exchange, on the other hand, stated that it is dedicated to the Brazilian market. Paxos also supplies crypto services to Argentinian online marketplace Mercado Libre Inc.
According to Coscetta, there has also been curiosity about expanding access to digital dollars in Latin America.
Paxos, which releases Pax Dollar, a stable coin tethered to the U.S. dollar, is eager to bring the currency to Nubank's platform, according to Paxos.
Nubank explained its investment decision in the Bitcoin world in a statement, saying that Bitcoin has over 40% of the market share in terms of all currencies and is regarded as the greatest currency due to its weight.
Paxos collaborates with some publicly listed organizations, including PayPal Holdings Inc., Interactive Brokers LLC, and Mastercard Inc., in addition to Nubank.
Nubank has lost more than a third of its market value in less than five months since going public, and it is under pressure from the expiration on May 17 of a share lockup that will let $26 billion of its stocks to be exchanged publicly.
Warren Buffet, chairman and CEO of Berkshire Hathaway, now has indirect bitcoin exposure because of Nubank's treasury allotment.
According to reports, the holding firm invested $500 million in Nubank in June 2021, bought 30 million shares for $250 million when the bank came out publicly in December, and recently doubled down with a $1 billion investment in Brazilian technology.