SAO PAULO :Brazilian fintech Meliuz has launched a new strategy allowing it to allocate part of its cash reserves in bitcoin and could eventually make the cryptocurrency the main asset of its treasury, it said on Thursday.
The company’s Sao Paulo-traded shares jumped more than 25 per cent.
Meliuz said it was aiming to capture “long-term returns” through the bitcoin investments, taking inspiration from firms such as U.S.-based Strategy, the biggest corporate holder of the cryptocurrency, and Japan’s Metaplanet.
Up to 10 per cent of Meliuz’s cash can be allocated in bitcoin, the firm said in a securities filing, adding it had already purchased 45.72 bitcoin for about $4.1 million.
Founded in 2011, Meliuz initially offered cashback payments at online stores, expanding into physical retail and app usage, and now also offers free digital accounts and credit cards.
The company went public in late 2020 but its stock collapsed in recent years amid Brazil’s high interest rates. It currently has net cash of more than 240 million reais ($41.72 million), according to the filing.
“Allocating a significant amount of our capital to fixed income investments may seem like a prudent strategy, but in practice we believe it represents a significant opportunity cost,” Chairman Israel Salmen said in a statement.
“This (new) strategy will not only protect and strengthen Meliuz’s financial position, but also has the potential to position us as pioneers in a financial transformation that is already underway globally.”
Meliuz will also conduct a detailed analysis, including on “the adoption of bitcoin as the main strategic asset of our treasury,” it said.
Analysts at UBS BB said that although fairly new among Brazilian companies, Meliuz’s strategy aligns with a growing global trend of seeking alternative stores of value and potential returns.
“If successful, the strategy might set Meliuz apart in attracting investors interested in crypto exposure,” they said in a note to clients. “On the other side, it could create more volatility to the results.”
($1 = 5.7533 reais)
