Nexo and Mastercard launch 'world first' crypto-backed payment card

Crypto lender Nexo has teamed up with Mastercard to launch world's first "crypto-backed" payment card.

LONDON,:

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 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.

Credit card is seen in front of displayed Master Card logo in this illustration taken, July 15, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

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% 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% for customers who maintain a loan-to-value ratio of 20% 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.

Electronic money firm DiPocket is Nexo's card issuer.