In a surprising turn of events Nubank, one of Brazil’s largest digital banks backed by heavyweight investors such as Berkshire Hathaway, has announced the immediate suspension of its native cryptocurrency Nucoin. The token was launched in March 2023 with hopes of revolutionizing the bank’s digital ecosystem.

According to a local news report citing emails sent to customers, the company’s decision to discontinue the offering stemmed from the ongoing market winter, which saw Bitcoin BTC $57 777 24h volatility: 0.6% Market cap: $1.14 T Vol. 24h: $34.88 B and Ethereum ETH $2 359 24h volatility: 0.1% Market cap: $283.98 B Vol. 24h: $15.90 B drop significantly from their recent highs in March 2024.

The Fall of Nucoin

Nucoin was launched with high ambitions. The digital assets were designed as part of a broader loyalty program that sought to integrate blockchain technology into the bank’s services.

The token, shared among its 70 million customers as an airdrop, was developed in a combined effort by Nubank and Polygon Labs. The bankteamed up with the crypto company in 2022 to enable the deployment of the token on Polygon, a layer-2 scaling solution built on Ethereum.

When Nucoin launched later in 2023, Fernando Czapski, the general manager, emphasized that the token represented another step in Nubank’s strong belief in blockchain’s potential. But just over a year later, the realities of market instability have forced Nubank to rethink its approach.

The bank explained that Nucoin was immediately suspended from trading on the platform to safeguard user interests and protect them from any potential market instability that may arise from the news of Nucoin’s discontinuation. The company has given users up to 15 days to cease all token buying and selling activities, with the final trading day set for September 25.

“To protect you and all participants from potential volatility in the market value of Nucoins due to potential reactions to this update, we have chosen to suspend your trading immediately,” Nubank stated in an email to its customers.

Conversion Options for Users

For Nucoin holders with a balance of at least R$100, Nubank is offering an option to convert their Nucoins into BTC or the USDC stablecoin. This conversion option provides a more stable and familiar alternative for those looking to preserve the value of their assets amidst the market downturn. Users are given 90 days starting from September 10 to complete the conversion process, with the deadline set for December 9

However, for those who decide not to convert, their tokens will not simply vanish. Nubank announced that moving forward, Nucoin will exclusively be used to redeem various benefits within the bank’s platform. These benefits may include discounts on Nubank’s shopping platform and access to exclusive brand experiences.

Nubank Rolls Out New Crypto Campaign

To ease the transition, Nubank has launched a prize campaign for its 16 million Nucoin holders. The campaign will feature monthly prizes of R$1,000 for 30 winners, a larger monthly prize of R$100,000, and a grand prize of R$1 million to be awarded at the end of the campaign.

While Nucoin’s journey as a tradable asset may be over, Nubank’s strategy of offering alternative cryptocurrencies like Bitcoin and USDC, combined with its prize campaign, aims to maintain user trust and engagement as the bank shifts its focus to new blockchain-based opportunities.