Nubank Wants the Whole World | The Public Ledger

Hello, Fintech Friends!

When Nubank presented its 2024 results, the deck ended on a slide called Looking Ahead, which set out a three act strategy. Act I was building the largest and most loved retail bank in Latin America. Act II was expanding beyond financial services. Act III was a global AI-driven digital banking model.

On the earnings call, David Vélez called that third act the long-term vision. "In 2025, we will take critical steps to turn this vision into reality by building the necessary foundations to support our products and services at a global scale."

Mario Pierry at Bank of America was not sold. Nubank captured less than 4% of Latin America's revenue pool, he thought Mexico was years from profitable, and he asked whether senior management could afford the distraction.

Vélez was clear it would take time. "To be a primary bank account, we have to go very deep in these markets. We have to get banking licenses. We have to get connected with a number of different local parties. So therefore, it has been a relatively slow internationalization."

He also said when things would start to accelerate. Nubank was building a core banking platform to run every country on one codebase. "We've actually been building this already for about 18 months and probably have another 18 to 24 months."

Last week Nubank filled a stadium in Miami with its own name on it and launched in the United States and 35 other countries at once.

In the US they launched a checking account and a credit card. The account pays 3.5% on whatever is sitting in it, so there is no separate savings account to move money into. The card has no annual fee and gives 1.5% back on everything you buy. Sending money to Brazil, Mexico and Colombia is free.

Nubank used a sponsor bank so it could launch now. Deposits sit at Lead Bank and are FDIC-insured. Nubank has its own charter on the way, approved by the OCC in January, but standing up a national bank takes far longer than borrowing someone else's. "We can't wait to open the doors of the bank next year," said Cristina Junqueira, who moved her family to Miami to run the business.

Then they announced Nu Global, which brings Nubank to another 35 countries across Europe and Latin America.

"It's a multicurrency account that sits on stablecoins, where customers can hold digital dollars and euros with a 3.5% annual yield on dollars and 2.2% on euros paid daily," Vélez said. Customers get a virtual Mastercard with no international transaction fee or exchange rate markup, free transfers across all 35 countries, and a short menu of digital assets.

The company behind it is Nu Global AG, registered in Zug, and it is not a bank. It belongs to VQF, a self-regulatory organization recognized by FINMA that supervises Swiss financial intermediaries for anti-money laundering purposes, and that is far easier to obtain than a banking license. Sygnum, a Swiss digital asset bank, holds the assets and provides the guarantee that pays customers back if Nu Global AG fails.

Nubank could have applied for a banking license in one EU country and passported it across the bloc, the way Revolut runs Europe out of Lithuania, then added a few more across Latin America. That would take years. Instead it registered one Swiss company and will hold customer money in stablecoins, which makes it a custodian rather than a depository institution.

Put the pieces together and Nubank has 140 million customers across Brazil, Mexico and Colombia, a live business in the US, and effectively Europe through Nu Global.

Nineteen months ago, Vélez told an analyst going global would be slow. They launched in less than two years. The work that starts now is the part he described in February. "To be a primary bank account, we have to go very deep in these markets."

"It is the first minute of the first half of that game," Vélez said in Miami.

Jevgenijs Kazanins

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