Cardless, a company that has provided credit cards for brands such as Qatar Airways and Alibaba, said it developed a payment card in conjunction with cryptocurrency exchange Coinbase (COIN) for stablecoin holders who cannot obtain one through traditional channels.
The stablecoin-secured Coinbase product is for situations where a regular credit card cannot be approved without collateral, but the applicant holds digital assets on the exchange, said Cardless co-founder Michael Spelfogel. Some of its stablecoin holdings are reserved as collateral against debt.
“People apply 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 cryptocurrencies, but they are just starting their journey 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% cash back in bitcoins . Cardless declined to say how many cards have been issued.
Traditional credit programs are rigid, slow 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.
