Warren Buffett, who once said cryptocurrency is nothing more than a “rat poison,” now invests $1 billion in a digital bank, Nubank, located in Brazil.

In particular, Buffet’s company Berkshire Hathaway purchased 1 billion worth of shares of a blockchain-based bank, also known as neobank. Nubank is the largest bank of its kind in Latin America.

The news came to light earlier this week when Berkshire Hathaway made SEC fillings of their investments.

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Nubank is a different type of bank than the traditional banking system. In contrast to other banks, it allows cryptocurrency in its transactions and offers products like Bitcoin ETFs (Exchange-traded-fund).

Warren Buffett, so-called the ‘Sage of Omaha,’ underestimated crypto potential and depreciated it many times, calling it an unproductive investment that has “no unique value at all.”

Likely, the long-time Buffet’s partner and Vice-chairman of Berkshire, Charlie Munger, had also been the one who didn’t refrain from publicly criticizing the digital asset market. For example, he recently said it might be good if the cryptocurrencies had “never been invented” and even noted he would not prefer a crypto trader to get married in his family.

Mainly, Munger has antipathy with Bitcoin, the widely traded and most giant coin of the crypto industry. He supported China’s decision to ban Bitcoin and also suggested U.S. authorities do the same. 

In Berkshire’s Q&A session held in May 2021, Munger said Bitcoin is “disgusting and contrary to the interest of civilization” considering its use in online crimes.

While commenting on China’s ban of Bitcoin, he stated in an interview;

The Chinese made the correct decision, which is just to simply ban them.

Although the company’s owners have long criticized the digital asset market, the investment of Berkshire Hathaway in Nubank is not for the first time.

Warren Buffett’s multinational holding firm had already purchased Nubank shares of $500 million months before it held Initial Public Offering (IPO) in December 2021. Nubank revealed that received investment of $1 billion is the largest single investment in their company.

As Warren Buffett continues to invest in crypto projects from last year, it also dropped some other options on the list, mostly skipping traditional assets.

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In the most recent SEC filing of $1 billion, the investment group has revealed that it had dropped more than 3 billion of its investments from the Mastercard and Visa.

Even though the world’s famous tech tycoons, Warren Buffett, and its partner, showed a distaste for cryptocurrencies but what changed their mind, maybe the opportunity to invest in a different type of financial service provider.

Due to the pain of underserving in the traditional banking system, a rally of digital banks is up and coming, especially in Latin America. The firms like Nubank will attract a huge number of users due to traditional banking drawbacks.

Cristina Junqueira, the cofounder of the Nubank, previously stated;

There is so much opportunity in the [Latin America] region. The combination of a great population, horrible customer experiences, and very high fees, it is unmatched. Worldwide there is no place that is better suited in terms of having a great opportunity for fintech companies to tackle.

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