Crypto lender Nexo said it has teamed up with global payments company Mastercard to launch on Wednesday what it calls the world’s first “crypto-backed” payment card.
It signals the latest move by crypto and incumbent financial networks to join forces as digital assets become more mainstream.
Nexo said the payment card, available in selected European countries initially, allows users to spend without having to sell their digital assets such as bitcoin, which are used as collateral to back the credit granted.
Most traditional credit cards are unsecured and have a set credit limit.
In this illustration from July 15, 2021, a credit card is seen in front of a displayed Master Card logo. REUTERS/Dado Ruvic/File Photo/Illustration.
The card is linked to a Nexo-provided crypto-backed credit line and can be used at 92 million Mastercard-accepting retailers globally, allowing investors to spend up to 90% of their crypto assets’ fiat value, according to Nexo.
“There are no minimum repayments, monthly fees, or inactivity penalties with this card. For up to 20,000 euros each month, there are no FX fees “Nexo said.
There are no limits on how much a consumer can spend or remove from an open credit line, and interest is only charged on the credit that is spent. Customers with a loan-to-value ratio of 20% or less continue to pay zero percent interest.
“Digital assets are transforming the financial world,” Raj Dhamodharan, Mastercard’s head of crypto and blockchain products and partnerships, said.
Nexo’s payment card is issued by DiPocket, an electronic money company.
To read our blog on “Coinbase and Mastercard teamed up to make it easy to buy NFT without crypto” click here.
