Cardless, a company that has facilitated credit cards for brands such as Qatar Airways and Alibaba, said it developed a debit card in conjunction with crypto exchange Coinbase (COIN) for stablecoin holders unable to get one through traditional channels.
The Coinbase stablecoin-secured product is for situations where a regular credit card cannot be approved on an unsecured basis, but the applicant has digital assets on the exchange, Cardless co-founder Michael Spelfogel said. Some of their stablecoin holdings are set aside as collateral for the debt.
“People are applying from all different parts of the credit spectrum,” Spelfogel said in an interview. “There are some people who want to use this method because they believe in cryptocurrency, but they are just starting their journeys and accumulating wealth.”
Cardholders who pay $49.99 for the privilege still earn returns on their sequestered USDC holdings, Spelfogel said.
The product builds on a partnership that began in September, when the companies introduced a Coinbase-branded card in partnership with American Express (AXP). That card offered up to 4% cashback in bitcoin . Cardless declined to say how many of the cards have been issued.
Traditional credit programs are slow-moving, rigid systems designed around banks that left billions on the table because businesses never had the tools to design credit on their own terms, according to Cardless.
