Latin America's Digital Bank Challenges Dollar Dominance with Stablecoin Push

Nubank, Latin America’s largest digital bank, is set to launch a pilot program allowing customers to make payments using dollar-backed stablecoins via credit cards. The initiative, announced by Vice Chairman Roberto Campos Neto, underscores the growing influence of blockchain technology in reshaping traditional finance, particularly in emerging markets. At the Meridian 2025 conference, Campos Neto emphasized the role of blockchain in bridging digital assets with conventional banking, enabling tokenized deposits while maintaining credit intermediation. He noted that stablecoins, especially those pegged to the U.S. dollar, are gaining traction in countries with non-convertible currencies and political instability, often serving as a store of value but increasingly evolving into tools for daily transactions.

The pilot aims to integrate dollar-backed stablecoin payments into Nubank’s broader services, aligning with the bank’s strategy to create a seamless financial ecosystem driven by artificial intelligence and blockchain technology. According to Campos Neto, the initiative highlights the geopolitical implications of stablecoins, as most are dollar-pegged, reinforcing demand for U.S. Treasuries and raising concerns in Europe. While he acknowledged the potential for euro-backed stablecoins in the future, he stressed that the dollar’s entrenched dominance remains difficult to challenge. If successful, the test could accelerate the adoption of stablecoins in Latin America, transforming them from speculative assets into practical payment instruments in emerging economies.

In parallel, Nubank is expanding a rewards program for its U.S. Dollar Coin (USDC) holders, offering a fixed annual return of 4% on a minimum balance of 10 USDC. This feature, previously tested with a small group of users, is now available to all customers of Nubank Cripto in Brazil. USDC, a stablecoin backed by the U.S. dollar and supported by highly liquid assets, provides a less volatile alternative to other cryptocurrencies. The bank reported a tenfold increase in USDC holdings among its customers in 2024, with over 30% now including the asset in their portfolios. Additionally, Nubank recently launched a cryptocurrency swap tool, enabling users to trade Bitcoin, Ethereum, Solana, and Uniswap for USDC with reduced fees, further enhancing the platform's utility.

The broader adoption of stablecoins raises both opportunities and risks for global finance. Dollar-backed stablecoins currently reinforce the U.S. dollar’s dominance in global payments, but their rapid growth has also sparked concerns about financial stability and regulatory oversight. Experts like Eneko Knörr argue that stablecoins could strengthen the dollar's position in international trade, while others, including Dean Baker, warn of potential risks such as regulatory arbitrage, liquidity issues, and the erosion of consumer protections. Policymakers are increasingly focused on addressing these concerns, particularly as stablecoins gain popularity in regions with weak banking infrastructure, where they promise faster, cheaper international transfers and greater financial inclusion.

Nubank’s move reflects a broader trend of traditional financial institutions adapting to the rise of digital assets. The bank previously partnered with Fireblocks, a leading blockchain infrastructure provider, to expand its blockchain solutions and enhance security for crypto asset custody. Through this collaboration, Nubank is developing new experiences using blockchain technology, including its involvement in the tokenized Real Digital pilot project with Brazil’s Central Bank. Fireblocks’ infrastructure also facilitates secure and efficient transaction settlements through its global network, connecting Nubank with regulated financial institutions and liquidity partners. As stablecoins continue to evolve from speculative tools into everyday payment methods, institutions like Nubank are positioning themselves at the forefront of this transformation, bridging the gap between traditional finance and the decentralized future.