Nubank to explore stablecoin integration for its credit cards

Latin America’s largest neo bank, Nubank, wants to integrate stablecoins pegged to the U.S. dollar into its credit card infrastructure.

Nubank insiders believe blockchain technology has the potential to bridge the divide between the traditional banking system and the digital assets market, which is why the bank is preparing pilot programs that would allow customers to settle credit card transactions using stablecoins, local media reports claimed.

Roberto Campos Neto, who is the former governor of the Brazilian central bank and serves as Nubank’s vice-chairman, is leading the stablecoin integration plans and said the bank will begin testing stablecoin-powered payments with its credit cards later this year. 

An exact timeline for the pilot, or a tentative launch date for the system, has not been disclosed.

“Today, the first problem cited by all central banks is the significant growth of the digital asset sector, and how to achieve this growth without generating credit disintermediation,” a translated quote from Campos Neto read.

“The main problem is finding a solution in which the bank can take a deposit in the form of a token and carry out a credit operation on top of it.”

He then went on to touch upon the rapid adoption of stablecoins, especially in emerging markets, explaining that they offer easier access to the U.S. dollar and are increasingly used as a hedge against local currency devaluation and economic uncertainty.

“What the data shows is that people aren’t buying to transact, they’re buying as a store of value. And we need to understand why this is happening. I think it’s changing a bit, but we need to understand it,” Campos Neto added.

Key Latin American markets, where remittances play an important role in household income, have all witnessed an uptick in stablecoin use over the past few years. Brazil, for instance, has seen stablecoins account for the majority of crypto transactions, according to central bank officials. 

Elsewhere, Argentinians have increasingly turned to USDt and USDC as inflation surged into triple digits, while in Venezuela, dollar-pegged tokens have started to replace the bolívar in daily commerce.

In fact, this demand hasn’t gone unnoticed by other players in the Latin American Banking sector. Earlier this year, Itaú Unibanco, the largest bank in Brazil and Latin America, disclosed it had plans to develop an in-house stablecoin.

Nubank’s history with blockchain and crypto

Since entering the digital asset space in 2022, when it launched crypto trading for its more than 100 million customers across Brazil, Mexico, and Colombia, Nubank has consistently introduced new offerings.

Back in March, the neo bank expanded its portfolio once again, introducing Cardano, Cosmos, Near Protocol, and Algorand to its platform. Earlier in the year, Nubank started offering 4% annual return on USDC holdings to become one of the first major banks in the region to integrate stablecoin yields into everyday banking apps.