Image Credit: Coinbase
Coinbase and Cardless have unveiled a stablecoin-secured version of the Coinbase One Card, giving some U.S. users a way to access credit by setting aside USDC as collateral.
The product is aimed at applicants who cannot qualify for a regular unsecured credit card but already hold digital assets on Coinbase. It adds another Coinbase consumer feature built around USDC.
USDC Deposit Sets $500 to $5,000 Limit
Coinbase says eligible users may be offered a Coinbase One Card with a security deposit after applying for the standard card. The security deposit is held in USDC on Coinbase and used to secure the card account.
Credit limits are set in $500 increments, with users choosing between $500 and $5,000. The selected amount comes from the user’s existing USDC balance, or Coinbase prompts the user to buy the remaining amount needed to secure the limit.
Cardless Handles Amex Card Infrastructure
Cardless provides the infrastructure behind the Coinbase One Card, including onboarding, servicing, wallet provisioning and underwriting support. The company says the card is managed inside the Coinbase app and runs on the American Express network.
The card is offered through Coinbase and Cardless and issued by First Electronic Bank. Coinbase says the Coinbase One Card is available only to U.S. residents, excluding U.S. territories, and requires an active paid Coinbase One membership.
Users Can Earn Up to 4% Bitcoin Back
Coinbase says cardholders can earn up to 4% Bitcoin back on purchases, with reward rates tied to the amount of assets they hold on Coinbase. Users can hold assets including USDC or USD to qualify for higher reward tiers.
Coinbase says the USDC security deposit can earn rewards at its standard USDC rewards rate, subject to eligibility and terms. That gives the product a different structure from traditional secured cards, where cash collateral usually does not earn a return.
Collateral Can Cover Unpaid Card Balances
The secured USDC cannot be withdrawn, sold, transferred or traded while it backs the card. If the card account is closed or goes into default, Coinbase says the USDC deposit can be used to cover the outstanding balance.
The product is limited to eligible U.S. Coinbase One members and uses USDC collateral to secure the credit line. Users who are approved can access a card limit tied directly to the USDC they set aside on Coinbase.
