Brazil’s Nubank suspends trading of its cryptocurrency Nucoin

Fintech financial institution Nubank has introduced that it has suspended buying and selling of its cryptocurrency Nucoin.

This comes towards the backdrop of a assessment of the financial institution’s monetary stability.

Nubank coverage modifications

In a weblog submit on September tenth postalNubank revealed that, efficient instantly, Nucoin can not be purchased and offered inside its app. Cryptocurrency is roll out It is going to be launched on the Polygon blockchain by the tip of 2022 as a part of a rewards program designed to offer customers with numerous advantages.

It should now be used completely as an asset to unlock advantages and rewards inside its ecosystem. These embrace reductions on Nubank Procuring and numerous expertise advantages promoted by the financial institution.

“We’ve got determined to droop buying and selling instantly to keep away from doable fluctuations within the worth of Nucoin available in the market,” the submit mentioned.

The financial institution added that prospects will retain the choice to change Nucoin for Bitcoin or digital {dollars} (USDC) till December 9, 2024. Yar.

The precise causes for the choice have been unclear, however the sudden change in coverage comes because the financial institution faces scrutiny of its monetary well being, together with rising considerations about rising dangerous loans and asset high quality.

Rising NPLs and Asset High quality

In line with Bloomberg Reportregardless that the corporate’s inventory surging With good points of greater than 60% this yr, some analysts have expressed reservations, calling it “overvalued.”

The report highlighted that Nubank’s non-performing mortgage ratio that was 90 days or extra overdue reached a document excessive of seven% within the second quarter, exceeding the trade common of 5.5%. On the identical time, the financial institution decreased dangerous debt provisions to $760 million from $831 million.

Fernando Fontoura, portfolio supervisor at Persevera Asset Administration, mentioned considerations about credit score high quality led the corporate to distance itself from it.

In June, Persevera offered its total place within the financial institution, calling it “crowding.” As well as, JPMorgan Chase and UBS each downgraded Nubank’s ranking to “impartial” in July, citing deterioration in asset high quality.

Nonetheless, the corporate’s executives defended its lending practices. Chief Working Officer Youssef Lahrech defined on the earnings name that the financial institution prioritizes long-term methods over short-term nonperforming mortgage metrics.

Its newsroom additionally disputed the report and mentioned the considerations raised didn’t replicate the general sentiment on Wall Road. They clarified that the information cited within the report have been primarily based on information from Brazil’s central financial institution, which makes use of a unique technique of calculating loss reserves in comparison with Nubank’s methodology.