Latin American Fintech Nubank Secures Preliminary OCC Authorization for US National Banking Operations
The preliminary authorization advances the fintech leader from Latin America into the organizational phase for establishing its banking entity as it pursues expansion of federally regulated financial services and cryptocurrency offerings throughout the United States.
The United States Office of the Comptroller of the Currency (OCC) has granted conditional authorization to Nubank for establishing a national banking institution, marking a significant milestone that will enable the financial technology company to provide deposit services, loan products, credit card offerings, and custody solutions for digital assets throughout the United States market.
The conditional authorization transitions Nubank into the organizational phase for establishing its banking entity, a period during which the company must satisfy capital requirements and supervisory prerequisites while obtaining supplementary authorizations from both the Federal Deposit Insurance Corporation and the Federal Reserve prior to commencing operational activities.
Based on a corporate statement released on Friday, the United States banking operation will operate under the leadership of co-founder Cristina Junqueira, while Roberto Campos Neto, who previously served as president of the Central Bank of Brazil, will assume the position of board chair. The company indicated its intention to achieve full capitalization and operational launch of the banking institution within an 18-month timeframe, contingent upon receiving final regulatory authorization.
The fintech company's primary operations are concentrated in Brazil, Mexico and Colombia, where it provides financial services to an extensive customer base exceeding 127 million individuals throughout these nations, based on company data. The organization was established in 2013 and achieved public listing status on the New York Stock Exchange in 2021.
Throughout recent years, the financial technology firm has progressively broadened its involvement in the digital asset sector.
The fintech's entrance into the cryptocurrency marketplace occurred in 2022 following a collaboration with Paxos that enabled account holders to purchase, sell and maintain ownership of cryptocurrencies directly through its mobile application. During that same period, the organization also revealed its strategy to dedicate approximately 1% of its total net assets toward Bitcoin (BTC) holdings.
During March, Nubank broadened its cryptocurrency portfolio available to Brazilian customers by incorporating Cardano (ADA), Near Protocol (NEAR), Cosmos (ATOM) and Algorand (ALGO) into its trading platform, elevating the complete count of available tokens to 20.
In September, the company revealed its intentions to conduct testing of payment systems utilizing dollar-pegged stablecoins connected to credit card networks as component of an initiative to merge digital asset capabilities with conventional banking service offerings.
Financial Technology Firms and Cryptocurrency Enterprises Pursue Banking Licenses in the United States
The pursuit by Nubank of a United States banking charter reflects a wider industry movement among financial technology and cryptocurrency enterprises toward obtaining regulated banking authorization.
Circle, a company that issues stablecoins, and Ripple Labs, a cryptocurrency enterprise, both obtained conditional authorization from the OCC during December for the establishment of United States national trust banking institutions. The regulatory agency additionally approved the transformation of BitGo Bank & Trust, Fidelity Digital Assets and Paxos Trust Company into nationally chartered trust banking entities.
On Jan. 23, Revolut, a cryptocurrency-friendly financial technology company, revealed its plans to submit an application for obtaining a United States banking license. The financial services provider based in London achieved a valuation of approximately $75 billion subsequent to completing a share sale transaction in November.