By Judith Gicobi
Nexo, a cryptocurrency lender, announced a partnership with Mastercard to produce the world’s first “crypto-backed” payment card on Wednesday.
As digital assets grow more widespread, it is the latest step by crypto and established banking networks to link together.
Nexo claims that the card, which is originally only available in a few European countries, enables consumers to spend without needing to sell digital assets such as bitcoin, which are used as collateral to guarantee the credit issued.
The majority of traditional credit cards are unsafe and have a pre-determined credit limit.
The card is connected to a Nexo-provided crypto-backed credit line could 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.
“The card requires no minimum repayments, monthly, or inactivity fees. There are no FX fees for up to 20,000 euros per month,” 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. Consumers 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, stated.
Nexo’s card is issued by DiPocket, a digital payment company.