N26 scoops Brazilian banking licence to take on Nubank

German digital bank N26 has received a green light from the Brazilan Central Bank, according to Brazilian publication Valor.

N26 has received a Sociedade de Crédito Direto (SCD) licence from the regulator, which will allow the fintech to “carry out credit operations” such as third-party credit analysis and the ability to issue electronic currency. 

The fintech, which unexpectedly quit the UK just shy of a year ago, first announced plans to launch in Brazil back in 2019.

N26’s Brazilian outfit is led by former Santander banker and head of business and product development at technology company Cielo, Eduardo Del Guerra Prota, who has been at the bank since February 2019.

With the German bank’s latest launch comes new challenges. 

N26 will be going head to head with the largest challenger bank in the world, Nubank.

Nubank has over 25m customers in Brazil and Mexico alone—for reference, N26 has roughly 5m customers across 25 different markets.

The Brazilian challenger has also acquired several other smaller firms in the past 12 months, buying US consultancy firm Cognitect in July 2020 and Brazilian digital investment platform Easynvest in September, both for an undisclosed amount.

N26 has found itself in hot water recently, filing a restraining order against employees that started a works council in an attempt to stop the group from forming back in August 2020 after employees alleged a breakdown in the relationship between staff and the leadership team. 

Despite this, the German digital bank had one of the largest funding rounds of last year, raising $100m as part of its $470m Series D funding round.