Nu Holdings Ltd has received preliminary approval to engage in certain banking activities in the US, marking a significant initial step for the Latin American fintech as it seeks to enter the world’s largest economy. The Office of the Comptroller of the Currency has granted conditional approval for a national bank license for Nubank, as stated in a Thursday announcement. The newly established entity will be referred to as Nubank NA. “The approval is not just an extension of our operation; it’s an opportunity to prove our thesis that a digital-first, customer-centric model is the future of financial services globally,” said David Vélez in the statement. Nubank is set to enter the organization phase in the US and is expected to launch its operations in the country within 18 months, according to the fintech.
“We look forward to delivering the transparent, efficient, financial experiences already trusted by more than 127 million customers around the world to our future customers in the US,” Cristina Junqueira stated. Upon the granting of a full licence, the fintech will have the capability to provide deposit accounts, credit cards, lending, and digital-asset custody services within the United States. The expansion capitalizes on a favorable moment in the US, where the regulatory landscape has shifted to become more accommodating to businesses under the Trump administration. That encompasses the approvals granted to five cryptocurrency companies that received licenses, along with PayPal Holdings Ltd’s choice to submit an application in December.
Nubank’s licence will signify a significant advancement for the company, established in São Paulo in 2013 by a team led by Vélez, Junqueira, and Ed Wible. The company will operate in the first country outside of Latin America, as it believes that the digital and low-cost model that has attracted 127 million clients to date can also succeed in the US. Company executives have indicated that the US represents more of a strategy for future development rather than a short-term focus. “While Brazil and Mexico remain our core priorities where most of our resources and execution efforts are directed, we also see transformational optionality in the US,” Vélez said in a November conference call. An expansion will encounter certain challenges in the US due to the banking market being significantly less concentrated than in Brazil, where Nu’s business model initially thrived.
The instant-payment system Pix has significantly contributed to the rise of digital banks in Latin America’s largest economy, facilitating the movement of money through digital channels. Junqueira stated in October that the US unit would initially target Latin American expats, while also appealing to the broader US public that is dissatisfied with their banks. She will take charge of the US operation once it is established.