The first cryptocurrency-based payment card was launched thanks to a cryptocurrency lender, Nexo, which has partnered with payment company Mastercard(MA.N).
Nexo said the card, which is initially available in select European countries, allows users to spend without having to sell their digital assets such as Bitcoin, which is used as collateral to secure an approved loan.
Most traditional credit cards are not secured and have a credit limit.
How is the payment card used?
The card is connected to a credit line provided by Nexo and supports cryptocurrencies.
It can be used by 92 million merchants worldwide where Mastercard is accepted, allowing investors to spend up to 90% of the value of their crypto assets, Nexo pointed out.
“The card does not require minimum repayments, monthly fees, or inactivity fees. “There are no foreign exchange fees of up to 20,000 euros a month,” Nexo said.
Also, there is no limit to how much a client can spend or withdraw from an open credit line, and interest is paid only on the amount of credit actually used.
Interest remains at 0 percent for clients who maintain a loan-to-value ratio of 20 percent or less.
“Mastercard recognizes that digital assets are revolutionizing the world of finance,” said Raj Dhamodharan of Mastercard.
Electronic money company DiPocket is a Nexo card issuer.
What is Nexo?
Nexo is a lending platform and is based on blockchain.
It offers customers instant loans that are backed by cryptocurrency.
Users accept tokens, such as Bitcoin(BTC), Ether(ETH), Litecoin(LTC), or KSRP(KSRP), as collateral for obtaining a loan in the form of fiat currency or stablecoin.
The original token, when locked in the platform, offers users various benefits.
For example, they have discounts on accumulated interest on loans and the possibility of receiving interest payments on deposited funds.
Token owners also have a dividend from Nexo’s profits.
Who is the founder of Nexo?
The company brought together a team of financial professionals and crypto enthusiasts dedicated to blockchain.
Their goal was to create a crypto equivalent of a service well established in traditional finance and non-existent in digital.
In 2018, the team launched the Nexo platform to offer the world’s first crypto credit lines that allowed digital asset owners to obtain fiat and stablecoin loans against their cryptocurrency, thus laying the groundwork for a niche for crypto lending.
The company’s staff has a rich experience of over 30 years in various financial services.
Co-founder and managing partner Antoni Trenchev additionally contribute with experience in financial law and in KIC and AML solutions.