While central banks of various countries are thinking of launching CBDCs, separate digital banks have begun releasing their own crypto, getting ahead of central banks.
Recently Nubank, a digital bank based in Brazil, has launched Nucoin in partnership with Polygon for its 70 million customers. This is not the first project of the kind that has been carried out in Brazil over the past year.
Nubank, a Brazilian digital bank with 70 million users, launched its own digital currency Nucoin, developed by Polygon, with a total of 100 billion, but only in the Nubank application, no secondary market, and it cannot be withdrawn to private wallets middle.— Wu Blockchain (@WuBlockchain) March 1, 2023
100 billion Nucoins, but there's a catch
According to the press release, Nucoin digital bank has issued its own crypto dubbed Nucoin in the amount of 100 billion that is intended to be used only by the bank's clients — 70 million of them.
The crypto was developed using the Polygon blockchain, the issuer of the MATIC token. This crypto will work as part of a customer loyalty program. It will be granted to clients as bonuses to be used within the bank, as not a single Nucoin will be allowed for withdrawal to a third-party wallet.
There will be no secondary market for this cryptocurrency, but 80% of the emittance will be given out to the bank's users. They will be able to use it within the ecosystem of Nubank itself and other companies that will partner with it to join the ecosystem in the future. All Nucoin transactions will take place within the Nubank mobile app.
Initially, the project was announced in 2022.
The initiative of Nubank is similar to that of Brazilian e-commerce behemoth Mercado Libre, which also launched a cryptocurrency in August 2022. Mercado Coin was made to be used in purchases on the Mercado Libre platform, and users will also be able to receive it as cashback on items they buy.
Benefits for Nucoin holders
The bank’s press release says that clients will be offered the option to freeze their Nucoin tokens to level up in the loyalty program. This will make them eligible for more of various benefits — getting more Nucoins or tickets in order to compete for prizes from the bank and its partners.
There also might be an option for clients to exchange Nucoins for cash with other customers of the bank.