In a move that is sure to excite crypto enthusiasts and hodlers, digital asset manager Nexo has announced a partnership with payment processing giant Mastercard (NYSE: MA) and fintech app DiPocket through which it will launch its new crypto-backed credit card.
Dubbed the Nexo Card, the card will allow users to spend their cryptocurrencies in real-time, without having to first convert them into fiat currency.
In a release accompanying the announcement, the company said that the card, which will enable users to spend up to 90% of the fiat value of their crypto, will launch in selected European markets and be accepted by 92 million merchants worldwide where Mastercard is accepted. The card also comes with Apple Pay and Google Pay integrations.
This represents a major step forward for the world of cryptocurrency, as it makes it easier than ever for people to use their cryptos for everyday transactions. Nexo also said the card will be backed by a user’s multiple crypto asset holdings as collateral.
Nexo co-founder and managing partner Antoni Trenchev, called the launch of the Nexo Card “first in Europe and then worldwide” a “big milestone,” noting that the Mastercard and DiPocket partnership is “the latest proof of the immense synergy between the existing financial network and digital assets.”
While crypto-backed credit cards are not a new concept, Nexo’s offering is the first to allow users to spend without having to sell their digital asset. This provides a more accurate gauge of the user’s credit line and helps to protect against volatility.
In addition, the use of cryptocurrency as collateral — and the fact that the card requires no minimum repayments, charges no inactivity fees, no FX fees for up to €20,000 (about $21,500) per month and pays out crypto rewards for each transaction — also allows for lower interest rates and more flexible repayment terms. As such, Nexo’s crypto-backed credit card is an innovative solution that has the potential to revolutionize the way that people borrow and spend money.
Mastercard’s Raj Dhamodharan said that cryptocurrecies “are revolutionizing the financial landscape,” and that the Nexo card offered customers “new and one-of-a-kind choices in how they pay and activate their crypto holdings.”
Nexo is the first company to offer a direct collateral crypto-backed credit card, and it is likely that others will soon follow suit.