Mastercard and Nexo have announced the launch of the world’s first “crypto-backed” payment card.
The Card Will Allow Consumers To Spend Their Cryptocurrency Holdings Anywhere Mastercard Is Accepted. The Card Will Also Offer A 0% Interest Rate On Cryptocurrency Purchases For The First Year.
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 and Mastercard Deal
Nexo said the 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.
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 percent 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 said.
There are no restrictions on how much a customer can spend or withdraw from the open credit line and interest is only paid on the amount of credit actually used. Interest remains at 0 percent for customers who maintain a loan-to-value ratio of 20 percent or below.
“Mastercard recognizes that digital assets are revolutionizing the financial landscape,” said Raj Dhamodharan, Mastercard’s head of crypto and blockchain products and partnerships.
