Coinbase and the fintech firm Cardless have introduced a new credit card that uses stablecoins as collateral. The card targets consumers who might not qualify for a traditional unsecured credit card, offering a secured alternative backed by digital assets.
How the card works
The card is secured by stablecoins — cryptocurrencies pegged to a stable asset like the U.S. dollar. Users deposit stablecoins as collateral, and their credit line is set against that deposit. Cardless handles the card issuing and processing, while Coinbase provides the crypto infrastructure. The companies say the product is meant for people who cannot get approved for a standard unsecured credit card, either due to limited credit history or other factors.
Who it's for
The card is aimed at crypto holders who want to leverage their digital assets to build or improve their credit score. Because it's secured, the issuer takes on less risk, making approval possible for applicants who might otherwise be declined. The companies did not disclose specific fees, interest rates, or reward structures, but noted that the card will function like a traditional secured credit card — just with stablecoins as the collateral instead of cash.
What's different
Most secured credit cards require a cash deposit. This card accepts stablecoin deposits, which means crypto users don't have to convert their holdings to fiat to get a card. It also keeps the value in a familiar digital form, potentially avoiding taxable events that come with selling crypto. Cardless has previously partnered with airlines and sports leagues for co-branded cards; this is its first crypto-collateralized product. Coinbase has been expanding its financial services beyond trading, including a debit card and now a credit card.
Remaining questions
Neither company has announced a launch date or specific availability. It's also unclear which stablecoins will be accepted and whether the card will be available outside the U.S. Regulators have increasingly scrutinized stablecoin issuers, and it's not known how the card's structure complies with banking and securities laws. The companies said more details will come in the following weeks.
