Nubank suspends trading of Nucoin amid financial scrutiny

Specifically, Nubank announced that Nucoin would no longer be available for purchase or sale within its app. Introduced in late 2022 on the Polygon blockchain, Nucoin was part of a rewards programme aimed at offering various benefits to users. Going forward, Nucoin will be used solely to unlock perks within Nubank’s ecosystem, such as discounts at Nubank Shopping and other advantages in bank-promoted experiences. The bank explained the decision, stating that its aim is to avoid potential volatility in Nucoin's market value. 

Despite the trading suspension, customers can still redeem their Nucoins for Bitcoin or USDC (digital dollars) until 9 December 2024. Nubank also plans to run raffles for users opting to exchange their coins. While the reasons for this shift remain unclear, the move comes in the context of broader concerns over the bank’s financial stability, including rising non-performing loans and asset quality issues according to cryptopotato.com.

Concerns about non-performing loans and asset quality 

The same source cites a recent Bloomberg report that highlighted these financial concerns, despite Nubank’s stock rising by more than 60% this year. Nubank’s non-performing loans, overdue by 90 days or more, reached 7% in the second quarter, surpassing the industry average of 5.5%. At the same time, the bank reduced its provisions for bad debt from USD 831 million to USD 760 million. 

Representatives from Persevera Asset Management, pointed to these credit concerns as the reason his firm divested from Nubank. In June, Persevera sold its entire position in the bank, referring to it as ‘overcrowded.’ Both JPMorgan Chase and UBS also downgraded their ratings of Nubank to ‘neutral’ in July, citing a decline in asset quality. 

Nubank’s leadership clarified during an earnings call that the bank focuses on long-term goals, rather than short-term fluctuations in non-performing loans. Nubank’s press office also responded to the criticism, noting that the data cited in reports is based on a different methodology than the one the bank uses for its loss provisions, which may have led to differing conclusions.