Coinbase and Cardless Launch Credit Card Backed by Stablecoins

Coinbase and Cardless have launched a credit card that allows stablecoin holders to use their digital assets as collateral, catering to those unable to secure traditional unsecured credit.

New Credit Card for Those Facing Credit Challenges

This innovative card targets users who struggle to obtain approval for standard credit cards, enabling them to leverage their cryptocurrency as collateral.

Key Features:

• The card allows users to reserve a portion of their USDC holdings on Coinbase as collateral.
• Applicants are required to pay a fee of $49.99 while still earning interest on their reserved assets.
• This product builds on the earlier partnership that introduced a Coinbase-branded card offering up to 4% bitcoin cashback.

Cardless, recognized for its credit card solutions for major brands, has partnered with Coinbase to create this tailored offering for stablecoin holders. According to Cardless co-founder Michael Spelfogel, the card serves individuals who may not qualify for conventional credit options but have digital assets stored on Coinbase. The collateralization of their stablecoin holdings will support their credit line.

Spelfogel remarked, “People apply from all different parts of the credit spectrum. Some individuals prefer this method because they have faith in cryptocurrency but are just starting to build their wealth.”

While cardholders will incur a $49.99 fee, they can still earn returns on their reserved USDC, which adds an attractive element to the offering. This latest initiative follows a successful collaboration launched in September, which featured a Coinbase-branded card in partnership with American Express, providing cashback in bitcoin. However, Cardless has not revealed how many cards have been issued thus far.

Cardless has been vocal about the limitations of traditional credit programs, arguing that they often lack the adaptability necessary for modern financial needs.