Mastercard and Nexo to launch the world’s first crypto-backed bank card

The digital assets will be used as collateral to back the credit granted

13.04.2022 - 13:35

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What’s new? Mastercard, an international payment system, has teamed up with Nexo, a crypto lender, to launch the world’s first crypto-backed payment card. The card’s issuer will be the financial app, DiPocket. This is reported by Reuters, citing Nexo.

Information on the Reuters website

What are the benefits of the card? According to the Nexo representatives, the card allows one to spend without having to sell one’s digital assets, which are used as collateral to back the credit granted.

“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 is no limit on how much a customer can spend or withdraw and interest is only paid on the amount of credit actually used. The cardholders are not charged interest for its use if the value of the loan does not exceed 20% of the card limit.

What had happened before? In November 2021, three companies in the Asia-Pacific region that joined the global Mastercard program, Crypto Card Programme, Bitkub, CoinJar, and Amber Group, announced the launching of their own cryptocurrency payment cards. They will allow users to convert virtual assets into fiat currency.

In January, the Coinbase cryptocurrency exchange announced a partnership with Mastercard. The companies’ joint initiative is aimed at launching the NFT purchase functionality using bank cards.

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