Nexo, a cryptocurrency lender, has announced a partnership with Mastercard (MA.N) to introduce 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 initially only available in a few European countries, allows users to spend without having to sell digital assets such as bitcoin, which are used as collateral to back the credit issued. The majority of traditional credit cards are unsecured and have a pre-determined credit limit.
“The card is linked to a Nexo-provided, crypto-backed credit line and can be used at 92 million merchants worldwide where Mastercard is accepted, allowing investors to spend up to 90% of the fiat value of their crypto assets,” Nexo said.
“The card requires no minimum repayments, monthly, or inactivity fees. There are no FX fees for up to 20,000 euros per month,” Nexo added.
There are no constraints on how much a consumer can spend or withdraw 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.
“Mastercard recognizes that digital assets are revolutionizing the financial landscape,” said Raj Dhamodharan, Mastercard’s head of crypto and blockchain products and partnerships.
Nexo’s card is issued by DiPocket, an electronic money company.