Cryptocurrency lender Nexo said it has partnered with global payments company Mastercard to launch what it calls the world’s first “cryptocurrency-backed” payment card on Wednesday.
It is the latest move by traditional financial networks and cryptocurrencies to join forces as digital assets become mainstream.
Nexo said that the card, initially available in some European countries, allows users to spend without having to sell their digital assets, such as bitcoin, which are used as collateral to support the credit granted.
Most traditional credit cards are unsecured and have a set credit limit.
The card is linked to a credit line provided by Nexo and backed by cryptocurrencies, 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 its crypto assets, Nexo said.
“The card does not require minimum monthly refunds or commissions for inactivity. There are no foreign exchange fees up to 20,000 euros ($21,600) per month,” Nexo said.
There are no restrictions on the amount a customer can spend or withdraw from the open line of credit, and interest is only paid on the amount of credit actually used. Interest remains 0% for customers who maintain a loan-to-value ratio of 20% or less.
“Mastercard recognizes that digital assets are revolutionizing the financial landscape,” said Raj Dhamodharan, head of crypto and blockchain products and partnerships at Mastercard.