Nubank (Nu Holdings), one of the largest digital banks in Brazil, was granted preliminary approval by the U.S. Office of the Comptroller of the Currency (OCC) to open a U.S. National Bank. The objective of this action is to create an officially regulated way for Nubank to provide crypto-related products and other financial services in the world’s largest economy.
What the License Means for Nubank
Nubank’s approval is a green light for its “organization phase” of development in the U.S. With its full charter, Nubank NA will be able to provide the full range of banking products, including deposit accounts, credit cards, secured loans, and custody for digital assets. This will enable the company to offer the popular crypto trading and custody solutions that it has provided to millions of customers throughout Latin America in a U.S. regulated banking environment.
This action will benefit from a new regulatory environment that favors fintech and crypto relative to how previous administrations have regulated this space.
Nubank Strategic Expansion
The importance of Nubank’s strategic expansion cannot be understated. A U.S.-based National Bank charter represents a major long-term investment and vision because it transforms the company from a regional disruptor into a significant global competitor in finance. Nubank’s primary focus will still be on Brazil and Mexico, but a presence in the U.S. allows Nubank to capitalise on brand recognition within the large Latino community and, more importantly, gives the digital bank access to a significant number of U.S.-American customers who are dissatisfied with traditional banking institutions.
Finally, acquiring U.S.-based regulatory recognition will allow Nubank to better mitigate risk associated with inconsistent regulatory requirements related to their U.S.-based operations, as well as provide them with an opportunity to grow their business in new and exciting ways.
