Nexo, a popular cryptocurrency lending platform, has partnered with Mastercard Card backed by cryptocurrency.. Officially announced in April, the payment card is associated with Nexo’s Instant Crypto Credit Lines, allowing users to use their digital assets as collateral.
Nexo isn’t the first in the game when it comes to cryptocurrency payment cards, but the company is pioneering cryptocurrency-backed cards and offering users an innovative way to use Fiat without selling cryptocurrencies.
The back of Nexo’s cryptographic backing card
Available to users of the European Economic Area (EEA), Nexo’s cards act as add-ons to the platform rather than stand-alone services. This card is an extended version of Nexo’s Instant Crypto Credit Lines, allowing customers to use their crypto as collateral to obtain fiat currencies that they can use.
With Nexo Cards, users can instantly access funds borrowed against their cryptocurrencies and use them at any of the 90 million Mastercard merchants around the world. All purchases made with the card will be automatically deducted from the user’s available credit line while the portfolio is intact. Cards can be used as collateral for one or more assets, and users can use up to 90% of the value of crypto holdings without selling.
Nexo card prices start at 0% APR and never exceed 13.9% APR. Nexo is positioned at a significantly lower rate than traditional credit card companies with rates ranging from 17.99% APR to 25.99% APR.
To enable an APR rate of 0%, users must maintain a loan-to-value (LTV) ratio of less than 20%. The card does not require a minimum monthly repayment and does not charge monthly, annual or inactive charges.
Card benefits vary by loyalty tier (basic, silver, gold, platinum), depending on how NEXO users make up your total portfolio balance. Users can enjoy free foreign currency transactions of up to € 20,000 per month, depending on the tier. When a user reaches the exchange limit, a 0.5% exchange fee will be charged for foreign currency transactions until the monthly limit is reset.
To encourage spending, Nexo has introduced a cryptocurrency reward program. With each purchase or ATM withdrawal, users can regain up to 0.5% on Bitcoin and up to 2% on NEXO, the platform’s native token. You can get up to 10 free ATM withdrawals per month, depending on your loyalty tier. For each additional withdrawal, you will be charged € 1.99 until the monthly limit is reset.
The physical version of the Nexo card has a wait period, but users have immediate access to virtual cards that can be added to the device via Apple Pay or Google Pay. Users can manage their balances and security through the Nexo app. The app also allows you to track transactions, change your PIN, and even freeze your physical card if you lose it.
Another important advantage that Nexo cards are over other cryptocurrency-backed cards on the market is the ability to optimize tax obligations. To use a crypto debit card, the underlying digital asset must be sold and converted into fiat money, triggering a taxable EEA event. Nexo cards use crypto as collateral and do not sell tokens, so there are no taxable events.
However, the Nexo card has its own drawbacks.
Despite its attractive offer, this card is only available to Nexo users residing in the European Economic Area. Nexo is also reported to be working to expand the list of countries where the card can be used, but its use is still limited to relatively small areas.
Depending on the interest the user pays on the loan, the cost of the card may outweigh its benefits. This is because getting a 0% APR is related to getting the highest royalties on Nexo.
Nevertheless, the beginning of the bear market and current price fluctuations Nexo card An attractive option for users with stable fiat income.
