The news is out about a collaboration between Nexo and MasterCard, which some say represents the first crypto-backed credit card of its kind.
For a while now, finance experts have been talking about the possibility of building crypto credit lines that are secured by the value of the digital assets themselves.
There is a philosophy where holders do not have to spend the underlying assets, but instead borrow credit against them in a way that is different from unsecured lending.
These new cards offer that kind of setup, with zero interest as long as loan to value ratio stays under 20%.
“The card requires no minimum repayments, monthly, or inactivity fees,” a Nexo spokesperson told Reuters. “There are no FX fees for up to 20,000 euros per month.”
There’s also quite a bit of a community around these cards, with 92 million merchants accepting them according to Reuters estimates.
The stakeholders claim some early interest in the cards is evident.
“Earlier this year, Nexo completed a trial roll out of the Nexo Card in selected European markets, and according to a company statement, found the trial run generated “extraordinary interest” and showed “high demand” for the product,” writes Scott Chipolina at Decrypt.
On the smartphone front, the cards will integrate with Apple Pay and Google Pay to combine contactless payments wit crypto credit.
The Dipocket wallet is suggested as a way to keep funds safe, and depositors have assurances that their money will be kept from unrelated use elsewhere.
“As an Authorized E-Money Institution DiPocket is required to hold customer funds with banks, in special segregated accounts,” writes a Dipocket spokesperson on the web site. “We hold your funds in stable European banks and we do not reinvest them. This means that DiPocket customer funds are protected from any claims against DiPocket.”
How will these crypto cards be received in the finance consumer’s world? We’ll see.
