Coinbase and Cardless launch a stablecoin-secured credit card for applicants who cannot qualify for unsecured cards. The collateral model shifts credit risk from income to digital assets.
Coinbase is launching a credit card that uses a user's stablecoin holdings on the exchange as collateral, the company confirmed through its partner Cardless. The card is designed for applicants who cannot qualify for an unsecured credit card through traditional banks but hold digital assets on Coinbase.
Michael Spelfogel, co-founder of Cardless, told CoinDesk that applicants span "all different parts of the credit spectrum." Some users simply prefer this method because they "believe in cryptocurrency" and are early in their wealth-building journey, he said.
The card is secured by the user's stablecoin balance. That structure effectively turns a digital asset position into a credit line, with the stablecoins acting as margin. If the borrower defaults, Coinbase or Cardless can seize the pledged stablecoins to cover the outstanding balance. This is not a new lending model – BlockFi and Celsius offered similar secured loan products before their collapses – packaging it as a payment card changes the distribution mechanism.
The borrower pledges USDC or another stablecoin held in their Coinbase wallet. The card issuer (Cardless, with Coinbase as the program manager) extends a credit line equal to a percentage of the pledged stablecoin value. This is functionally identical to a secured credit card offered by banks, where a cash deposit serves as collateral. The difference is that the collateral here is a digital dollar token, not fiat money in a savings account.
Key parameters not yet disclosed in the source include the loan-to-value (LTV) ratio, the interest rate, and whether the stablecoin collateral earns yield while pledged. If the stablecoin does earn yield, the borrower could offset some of the borrowing cost – a feature traditional secured cards do not offer. If it does not, the borrower faces the opportunity cost of locking up capital that could otherwise be deployed in DeFi or staked.
Spelfogel's comment about applicants spanning "all different parts of the credit spectrum" is the core of the product thesis. Traditional credit card underwriting relies on FICO scores, income verification, and debt-to-income ratios. A borrower with a thin credit file – no credit history, limited income documentation, or a past delinquency – gets declined for an unsecured card. That same borrower may hold $10,000 in USDC on Coinbase. The stablecoin card converts that digital asset position into a credit line without requiring the borrower to sell the crypto.
This is a collateral-based lending model, not a creditworthiness model. The lender's risk is not the borrower's ability to repay from income. The risk is the value and liquidity of the collateral. Stablecoins are designed to maintain a 1:1 peg to the U.S. dollar, so the collateral value should be stable. The lender's exposure is limited to the difference between the loan amount and the collateral value, plus any liquidation costs.
This card extends a partnership that began in 2024, when Coinbase and Cardless launched a Coinbase-branded card through the American Express network. That first product was a debit-style card tied to the user's Coinbase balance. The new card shifts from debit to credit, which changes the economics for both issuer and user.
Cardless itself is a fintech that builds bank-branded card programs on modern infrastructure, competing with legacy processors like Marqeta and Galileo. Spelfogel's comment about "modernizing bank-based card programs" signals that Cardless sees the Coinbase stablecoin card as a template for other digital-asset-native lending products.
American Express (AXP) is involved in this second card through the network rails, the lending risk stays with Cardless and the collateral pool. AXP collects interchange fees on transactions. For AXP, the arrangement is a low-risk way to gain exposure to crypto-native spenders without underwriting unsecured loans to that cohort.
The partnership structure is worth watching because it separates the credit risk (Cardless and Coinbase) from the network risk (AXP). If default rates on stablecoin-secured cards prove higher than modeled, the loss hits Cardless and Coinbase, not AXP.
The previous Coinbase Card was a debit card: the user could only spend what they held in their account. The user had to sell crypto to fiat before spending, which created a taxable event in many jurisdictions. The new credit model allows the user to retain the crypto position, borrow against it, and repay the credit line later – potentially deferring the taxable event until they choose to sell.
Source: CoinDesk interview with Cardless Co-founder Michael Spelfogel, June 9, 2025.
The Coinbase card is one data point in a broader push to make crypto spendable at mainstream merchants. Revolut launched its first physical crypto debit card last month. WalletConnect CEO Jess Houlgrave told PYMNTS that merchants want crypto payments to be "a switch-on in a dashboard" that does not change their accounting processes.
Houlgrave's comment captures the operational hurdle: merchants do not want to reconfigure their settlement systems, fraud protocols, or reconciliation workflows to accept crypto. They want the existing card rails to work, with the crypto complexity hidden on the issuer side.
The source quotes Houlgrave: "Accepting a crypto payment is not super simple. You've got to have the connectivity, the user experience, the wallet infrastructure, the settlement infrastructure, the conversion and liquidity infrastructure. There's a lot of pieces there."
That list is a useful checklist for anyone evaluating crypto payment stocks or token projects.
What would confirm the product has market fit:
What would weaken the thesis:
One practical lens: the Coinbase-Cardless card is a distribution experiment. The borrower base is people who already hold stablecoins on Coinbase and cannot get a standard unsecured card. That is a specific cohort – crypto-native, thin-file, high-intent. The question is not whether the card works as a product. The question is whether the cohort is large enough to generate meaningful revenue for Cardless and Coinbase.
For American Express, the arrangement is a moat play. AXP gets to underwrite spend volume from a demographic that typically uses debit or no card at all. If stablecoin-secured lending grows, AXP captures the interchange revenue without taking the credit risk. That is the same logic that drives AXP's partnership with Apple Card issuer Goldman Sachs, with a higher-risk collateral asset.
The AXP stock page shows an Alpha Score of 58/100 (Moderate). The score reflects a mature business with stable cash flows limited earnings growth catalysts. A crypto-collateral card program is unlikely to move the needle for AXP in 2025, it extends the network's distribution into a cohort that traditional banks under-serve. That is a long-term structural advantage, not a near-term earnings driver.
The next concrete marker to track is whether Cardless or Coinbase discloses specific LTV ratios and interest rates. Those terms will determine whether the product is competitive with secured cards from Capital One or Discover, which typically require a cash deposit of $200 to $2,000 and offer interest rates around 25% APR. If Coinbase's stablecoin card offers a lower APR and a higher LTV, it could pull users away from traditional secured cards. If the terms are worse, the product will remain a niche tool for crypto-native users only.
Also worth watching: how Coinbase handles the stablecoin yield question. If USDC collateral in the card program earns the Coinbase staking yield (currently around 3-4% APY) while pledged, the effective borrowing cost drops materially. If the collateral earns nothing, the user faces an opportunity cost equal to the yield they could have earned by leaving the USDC unstaked. Cardless and Coinbase could structure the product to share the yield with the borrower, lowering the net interest cost and widening the addressable market.
A minor real second-order effect: if this card gains traction, it could increase the float of USDC that sits on Coinbase's balance sheet, which strengthens Coinbase's position as a liquidity provider in the stablecoin ecosystem. That dynamic is worth tracking for anyone with exposure to Circle (private) or to Coinbase's own revenue mix.
For a broader look at how exchange-linked payment products are reshaping crypto spending patterns, see AlphaScala's crypto market analysis. The trend line is clear: issuers are moving crypto from a speculative asset class to a spending medium, and the card network is the most efficient distribution channel to achieve that.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.