Following the news that Warren Buffett’s firm, Berkshire Hathaway, has offloaded Visa and Mastercard shares worth over $3 billion in favor of a $1 billion investment in Brazil’s largest fintech, Nubank;

Beyza Karakoy, Thematic Analyst at GlobalData, a leading data and analytics company, offers her view:

“Traditional credit companies such as Visa and Mastercard are losing out to more tech-savvy fintech alternatives. Fintech, a term used to describe the digital transformation of financial services, is revolutionising banking by making it easier for customers to manage their finances through online channels. This isn’t Berkshire’s first dealing with Nubank—Buffett’s firm previously invested $500 million in the fintech in July 2021—and won’t be its last.

“Buffett’s decision to increase his stake in Nubank, which allows customers to invest in bitcoin, also highlights the growing importance of blockchain— a technology that maintains a secure and decentralized record of transactions by combining openness with security to verify information—in financial services. Blockchain plays a key role in the financial industry, and benefits of the technology include speeding up payments, improving transparency, and eliminating intermediaries. GlobalData forecasts that the financial industry will maintain a strong pace of blockchain investment, with a compound annual growth rate (CAGR) of 48% between 2020 and 2030.”