Coinbase plans to release a new credit card that would enable customers to take out loans in exchange for collateral in the form of USDC tokens. The release of this new crypto-based credit card will be carried out through cooperation with the company called Cardless, and the goal is to provide customers that hold stable coins on the platform with the ability to gain access to credit through another channel.

It should be noted that cryptocurrency companies are trying to expand into other sectors besides trade and investments. Currently, more information regarding all the features of the credit card hasn’t been provided.

Coinbase and Cardless Reveal New Credit Product

The tweet provided by Coin Bureau X account, Coinbase and Cardless are collaborating on a credit card linked to the USDC token. In accordance with the information revealed, the selected users will have the opportunity to secure lines of credit using the amount of USDC available to them.

The stated setup contrasts with conventional credit cards in terms of their dependence on the credit score and credit history of the borrower. As compared to this, the newly introduced product depends on the digital assets owned by the user in Coinbase’s custody.

A launch date has not been announced yet, nor has there been mention of any geographical region or borrowing limit.

USDC Takes on a New Role

USDC is one of the biggest stablecoins in the world of cryptocurrencies. The stablecoin’s mechanism is to ensure that its value remains tied to that of the US dollar. This makes USDC popular among people who make payments using the stablecoin.

Using this credit card system, the USDC token can play an additional role other than acting as an avenue for transactions and as storage of the tokens. It allows users to own the tokens but gain credit based on the ownership of those tokens.

There have been numerous lending products by crypto companies in recent times. However, unlike most crypto lending products, this product is built around consumer credit.

Focus on Users Outside Traditional Credit Systems

As reported by Coin Bureau, the product would be aimed at people that might not meet the usual criteria for credit but have crypto assets in Coinbase.

It is common for people to face difficulties while obtaining conventional credit products due to insufficient credit history or tough lending policies. This could be one more way to receive a loan without depending solely on conventional underwriting measures.

There has been no information provided by the firms concerning other requirements for qualification. More information will be announced in due course.

Growing Interest in Crypto-Based Financial Services

This latest planned rollout is indicative of the trend amongst crypto firms in terms of introducing more financial products based on digital assets. Exchange firms and other fintech businesses continue to explore ways through which they can tie cryptocurrency to regular financial dealings.

Stable coins being increasingly used by people have led to the introduction of various products by companies that try to incorporate them into daily financial services. The latest partnership between Coinbase and Cardless represents yet another innovation in incorporating crypto-based technology.

It will be interesting to see what more details emerge concerning this product before its actual release.