[ad_1]
Financial startup Arrington XRP Capital supported by Nexo unveiled a crypto card with a line of credit secured by the user's encrypted holdings.
Nexo is badociated with an unidentified intermediary to issue the card, which offers users a way to "spend the value of their crypto without actually spending it," said firm partner Antoni Trenchev.
Unlike other cryptographic credit cards such as TenX and Crypterium that convert cryptocurrency into fiat for each transaction, Nexo guarantees encryption of users and provides them with an identical loan of the same amount. Since its inception, the startup has granted more than $ 700 million in crypto-secure loans to more than 200,000 customers. Loans can now be used to make purchases from merchants who accept Mastercard via a co-branding system.
After performing a scan, an oracle confirms that the user has enough collateral to cover the purchase, runs an instant loan and settles the transaction in fiat.
Trenchev said, and that the issuer of the card is licensed in the European Economic Area. Through additional partnerships with intermediaries, Nexo intends to expand into the United States and Asia by the end of the year.
Guaranteed loans
Cards are available regardless of the customer's credit history, as the collateral involved reduces the risk of default. Similarly, interest rates are set between 8% and 24% in April based on loan structure and local regulations.
Users can repay their loans in crypto or fiat, although the use of the Nexo token reduces interest rates to 8%. In addition, the minimum payments will be eliminated if the value of bitcoin increases. Indeed, the line of credit is "dynamic", meaning that when the value of a client's guaranteed badets increases relative to the market, their direct debts decrease.
In fact, cryptographic entrepreneur Brock Pierce mortgaged a house in Amsterdam with a $ 1.2 million Nexo line of credit and made no repayment due to the increasing value of bitcoin since his loan, said Trenchev.
Conversely, in the event of cryptocurrency blocking, users will either have to deposit more crypto, pay part of their loan to reduce their exposure, or sell part of their collateral to restore the loan / loan ratio. value, "said Trenchev.
The company complies with the Know Your Customer protocol, respects international sanctions and has integrated with Blockchain investigators, Chainalysis, to check if a collateralized crypto has been poorly acquired.
Trenchev calculated the company's profit at $ 3 million for the first seven months of the year. Nexo had already paid dividends of 30% to its token holders.
Nexo crypto card courtesy of Nexo
Source link
