Arrington XRP Capital-backed financial startup Nexo unveiled a crypto card with a line of credit backed by user's crypto holdings.
Nexo partnered with an unnamed intermediary to issue the card, which offers a way for users to "Spend the value of their crypto without actually spending it," said firm partner Antoni Trenchev.
Unlike other crypto credit cards like TenX and Crypterium that convert cryptocurrencies to fiat for every transaction, Nexo collateralizes users' crypto and supplies them with a fiat loan of them same amount.
An oracle confirms the user has enough collateral to cover the purchase, instantaneously executes a loan, and settles the transaction in fiat.
Through additional partnerships with intermediaries, Nexo aims to expand to the U.S. and Asia by the end of the year.
Users can repay their loans in either crypto or fiat, though using Nexo's token will reduce interest rates to 8 percent.
Crypto entrepreneur Brock Pierce, mortgaged a house in Amsterdam through a Nexo $1.2 million line of credit, and hasn't made a single repayment due to the rising value of bitcoin since he took the loan, Trenchev said.
Conversely, if cryptocurrencies crash, users will either have to "Deposit more crypto, pay a part of their loan to reduce exposure, or sell a portion of their collateral to restore the loan-to-value ratio," Trenchev said.
The company complies with Know Your Customer protocol, follows international sanctions, and has integrated with blockchain investigators Chainalysis to check if collateralized crypto has been ill-gotten.
Nexo has previously paid out dividends of 30 percent to its token holders.
Nexo Launches a Debit Card That Lets You Not Spend Your Crypto
pubblicato su Aug 2, 2019
by Coindesk | pubblicato su Coinage
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