This article is from cointelegraph.com.br and the original article can be read here in Portuguese
Despite a period of economic recession echoing over the Latin America, which can already be seen by the slowdown in venture capital investments in startups, who switched from the accelerator to the brake pedal in recent months, the CEO and co-founder of Nubank, David Velez, in an interview published by Bloomberg Line, said that the financial institution should not follow the wave of layoffs that affects other companies, which announced massive cuts recently. In addition, the businessman reinforced Nubank’s commitment to cryptocurrencies, arguing that they represent a disruptive technology belonging to the future of financial services and, in addition, a bullish bet, in Vélez’s vision.
The executive explained the reasons why the Nubank announced the offer of trading in cryptocurrencies, which took place through a partnership between the bank and Paxos. According to David Vélez, Nubank’s approach to the cryptocurrency market is related to the growing interest of the bank’s customer base, who have massively migrated in recent months from savings accounts to cryptocurrency platforms.
He also said that Nubank wants to understand its customers who opt for cryptocurrencies and, at the same time, prepare for the future, as crypto-assets, according to him, will be at the top of the disruptive technologies of the financial services of the future. Vélez revealed that Nubank reserved 1% of the company’s balance sheet for the Bitcoin (BTC) and said he was optimistic about long-term investment despite the risks arising from the cryptocurrency’s volatility.
The businessman said that it will be inevitable that Nubank will increase its interest rates because the cost of funding goes up, although, according to him, Nubank practices lower rates than other banks. Despite the moment of high interest rates and inflation, he revealed that the moment is more benign than other phases crossed by the company, including the 7% drop in Brazilian GDP in 2017, the worst recession in Brazil in 100 years.
The CEO was also asked about the losses announced in a balance sheet for the first quarter of 2022. He explained that Nubank has a lot of potential for operational leverage and that the number of customers grew by more than 220% in the last quarter, in addition to investments from the credit card profit, the bank’s main product, into new products in Brazil.
Regarding Nubank’s operations in the Mexico and on Colombia, he said that profitability in these countries is at an early stage and that the credit recently announced for these two countries, US$ 650 million, will also be directed towards financing credit cards, although he did not confirm other short-term investments in these countries, nor the goals for 2022, including for Brazil.
Regarding possible layoffs, which happened massively in startups in Latin America in recent weeks in the wake of the macroeconomic situation, he ruled out this possibility, arguing that the bank has invested a lot in its employees to become more efficient and that the goal is to increase operational efficiency and cut unnecessary expenses. In addition, he stressed that the company is in a comfortable position after initial public offering (IPO) in December last year, responsible for raising US$ 2.8 billion, of which more than US$ 1 billion is still in cash.
Ironically, Nubank, which bets on cryptocurrencies in present operations and with an eye on the future, had $1 billion from mega-investor Warren Buffett, the “Oracle of Omaha”, a declared Bitcoin disaffect to the point of declaring that he wouldn’t even pay $25 for all the BTC in the world, as reported by the Cointelegraph Brazil.
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