Nexo launches Mastercard-backed crypto card
UK-based crypto lender Nexo has introduced a new crypto-powered debit and credit Mastercard, which will be initially available in selected European countries. The card allows users in the European Economic Area (EEA) to spend without having to sell their digital assets, which are used as collateral to back the credit granted.
As announced today, the Nexo Card offers EEA residents the ability to spend their euro, U.S. dollar, and British pound stablecoins via debit transactions at more than 100 million merchant terminals globally. Balances stored on the card can earn up to 9% in annual interest.
Mastercard also integrates supported cryptocurrencies into its loyalty solutions, enabling its partners to offer rewards and loyalty points in digital assets. This allows consumers to earn and spend their rewards in cryptocurrency instead of traditional loyalty points and then convert their crypto holdings to pay for purchases.
On the other hand, credit transactions through Nexo Card utilize major cryptocurrencies like Bitcoin as collateral. This feature provides users with up to 2% cash back and also offers interest rates of 16% per annum on used credit lines. Both debit and credit transactions automatically convert users’ crypto holdings into fiat currency when used at terminals. Nexo asserts that the assets stored in the card are insured by Ledger and Bakkt.
Nexo Card comes with a range of benefits, including no monthly or inactivity fees, foreign exchange fee exemption for transactions up to 20,000 euros ($21,700) per month, and a monthly ATM withdrawal limit of 10,000 euros ($10,800). Following the successful completion of Know Your Customer verification procedures, users will receive both a virtual and a physical card, both of which can be linked to Apple Pay and Google Pay. However, the card is exclusively available to citizens of the 30-country EEA.
Nexo Card signals the ongoing trend of collaboration between cryptocurrency platforms and established financial networks, as digital assets continue to gain broader acceptance in mainstream markets. Interestingly, it comes shortly after major payment companies Mastercard and Visa have decided to terminate their crypto card partnerships with Binance distancing themselves from the exchange amid increasing regulatory scrutiny and challenges it faces in various jurisdictions.
Earlier in the year, Nexo faced a police raid on its corporate offices in Sofia, Bulgaria, on charges of violating sanctions and Anti-Money Laundering laws involving Russia. The company said it will take legal action against the Bulgarian government for damages related to the incident.