In its latest effort to facilitate cryptocurrency transactions, crypto exchange and lending platform Nexo has partnered with Mastercard and DiPocket to launch a crypto credit card backed by digital assets.
In a press release published recently, Nexo deemed this innovative instrument as the first of its kind. Backed by client’s assets stored within the Nexo platform, it is set to function as a secured line of credit, where the card will be accepted in any of the more than 90 million establishments that are currently powered by the Mastercard network.
In this offering, DiPocket will be the card issuer and the instrument will allow users to use their digital assets without having to sell them.
The Nexo payment card will be initially available in Europe only and it will allow Nexo account holders to borrow funds at an entry 0% APR as long as they maintain a loan-to-value (LTV) ratio lower than 20%. The applicable APR for higher LTVs was not disclosed by the firm in this instance.
Users will be able to spend up to 90% of the fiat value of their crypto assets, according to Nexo. Additionally, they stated that there will be no FX fees for balances under €20,000 per month.
Crypto investors will not have to give up or transfer their crypto holdings to access the product, Nexo clarified, and the vendor plans to offer 2% cash-back rewards for every transaction. These rewards will be paid out in Bitcoin (BTC) or NEXO – the platform’s native crypto token.
Nexo said that it has already conducted a test pilot of this payment card in Europe and the results were quite pleasing as the limited group of users who had access to the beta product demonstrated “extraordinary interest” for the instrument.
Mastercard believes that digital assets are revolutionizing the financial landscape and we are leading in innovation with programs like our partnership with Nexo to deliver people new and one-of-a-kind choices in how they pay and activate their crypto holdings.Raj Dhamodharan, Mastercard’s Head of Crypto
This unique product will allow millions of people, first in Europe and then worldwide, to spend instantly without having to give up the potential of their cryptocurrencies, thus offering unprecedented everyday utility for the emerging asset class.Antoni Trenchev, the co-founder of Nexo
Nexo Credit Card For Ease of Doing Business With Crypto
Multiple companies within the crypto world have partnered with traditional financial institutions and fintech companies to facilitate transactions that involve the use of digital assets.
Liquidity and ease of use remain the most important barriers that crypto products must overcome to become widely adopted by the general public.
This alliance between Nexo, DiPocket, and Mastercard is facilitating the process of using crypto assets for making regular transactions such as buying groceries, apparel, or some coffee.
Other interesting collaborations between crypto and large financial networks include Crypto.com’s Visa debit card, Gemini’s credit card powered by Mastercard and Coinbase’s and BlockFi’s Visa payments cards.
The fact that users are not forced to sell their holdings to spend their assets to cover their living expenses is a particularly attractive feature as price volatility in the crypto market could lead to poorly timed transactions that can severely hurt the investor’s net worth unnecessarily.
That said, some more details about the inner functioning of these products remain relatively unclear such as what happens when the loan-to-value exceeds the 90% threshold and what is the applicable APR for loans that exceed the 20% quota mentioned by Nexo.
HODL Crypto As Collateral With Nexo Credit Card
The Nexo Card encourages you to HODL your crypto, rather than sell it. This differs from regular cards in the crypto space that sell the equivalent of the amount you spend. Nexo card functions through it’s crypto-backed credit lines which means that funds for clients purchases come from their available credit line while their digital asset portfolio remains intact.
Essentially, clients use their crypto as collateral while spending its value at millions of merchants globally, everywhere where Mastercard is accepted. One can use both just a single asset or multiple cryptocurrencies and stablecoins as collateral which enables one to spend up to 90% of the value of your crypto through the Nexo Card.
Benefits Of Using Nexo Crypto Credit Card
- Up to 2% in Crypto Rewards
Get up to 2% in crypto rewards on all transactions, paid out in BTC or NEXO.*
- Crypto Credit from 0% APR
Get instant access to your credit line and borrowing rates starting from 0% APR.**
- No Monthly Fees
No monthly, annual, or inactivity fees.
- No Minimum Monthly Repayments
Have ease of mind and repay at your own pace.
- Free Virtual Card
Issue free a virtual card instantly and use it through our app or with the Apple Pay & Google Pay integrations.
- Free ATM Withdrawals
In case you ever need it, the Nexo Card also gives you up to 10 free ATM withdrawals per month with a monthly limit of up to €10,000.
- Zero Fees
No FX fees for up to €20,000 per month.***
- 40М+ Мerchants
Swipe or tap your card at millions of locations worldwide.
- Optimize Tax Liabilities
Our card does not sell your assets, so it may be a great way to optimize tax liabilities.
How to Order the Nexo Crypto Credit Card?
- Activate Your Card: Tap on the ‘Activate Nexo Card’ button to issue your virtual card in seconds.
- Add to Apple or Google Pay: Select ‘Add to Wallet’ and follow the on-screen instructions to add your card to Apple Pay or Google Pay.
- Start Spending: That’s it! You can now go shopping and earn up to 2% cashback on every purchase.
What Crypto Loyalty Rewards Will I Get with My Nexo Credit Card?
Since the Nexo Card is a part of the Loyalty program, the more NEXO Tokens you have in your accounts, the more you will receive in crypto rewards when you use your card. Each Loyalty tier has its own crypto rewards rate; here is a breakdown:
- Platinum: 2% in NEXO Tokens or 0.5% in BTC
- Gold: 1% in NEXO Tokens or 0.3% in BTC
- Silver: 0.7% in NEXO Tokens or 0.2% in BTC
- Base: 0.5% in NEXO Tokens or 0.1% in BTC