Coinbase expands credit access with USDC card

Coinbase and Cardless have moved to widen access to crypto-linked consumer credit by adding a stablecoin-secured version of the Coinbase One Card for applicants who cannot be approved on an unsecured basis.

The product allows eligible Coinbase One members in the United States to pledge USDC held in, or purchased through, their Coinbase wallet as security for a credit card issued by First Electronic Bank and offered through Cardless. The card runs on the American Express network and is designed to sit alongside the standard Coinbase One Card, which offers bitcoin rewards on purchases and is subject to normal credit approval.

The new secured structure marks a notable shift in the way digital assets are being used in mainstream credit products. Rather than treating stablecoins only as payment or trading instruments, the arrangement uses USDC as collateral supporting a revolving credit account. Applicants who do not meet unsecured credit requirements may be offered the option of designating USDC as secured funds for the Coinbase One Card with Security Deposit.

The pledged USDC cannot be withdrawn, transferred, lent, sold or traded while the secured card account remains open and any amounts owed are outstanding. Cardless is initially designated as the control party over the secured USDC, while First Electronic Bank remains the issuing bank. If a customer defaults or closes the account with unpaid balances, the secured USDC may be transferred, sold or liquidated to cover the amount owed.

The mechanism resembles a traditional secured credit card, where a cash deposit reduces issuer risk, but replaces the bank deposit with a dollar-pegged digital token. That distinction is important because USDC is not a bank deposit and is not covered by deposit insurance. Coinbase states in its user terms that USDC remains a supported digital asset and is not legal tender, while also noting that digital assets are not protected by FDIC or SIPC insurance.

For Coinbase, the card expands a consumer-finance strategy that has moved steadily beyond trading fees. The Coinbase One membership bundle already includes zero trading fees on limited monthly volumes, USDC rewards, staking boosts, account protection and access to the credit card at no added charge beyond the subscription. Annual membership for the basic tier starts at $49.99, and the card is available only to US customers, excluding US territories.

The rewards structure remains a key attraction. Cardholders can earn up to 4 per cent back in bitcoin on eligible purchases, with the rate tied to the value of assets held on Coinbase. Customers with less than $10,000 in assets start at 2 per cent, while higher tiers rise to 2.5 per cent, 3 per cent and 4 per cent. Rewards above the base tier are capped after $10,000 in eligible monthly spending, after which the rate falls back to 2 per cent.

Cardless gains a high-profile partner for its embedded credit platform, which provides programme management, application flows and credit-card infrastructure for consumer brands. The Coinbase relationship gives the company a foothold in a segment where crypto platforms, banks and card networks are testing new ways to connect digital wallets with familiar payment rails.

The timing reflects broader momentum behind stablecoins in payments and lending. The stablecoin market has grown into a sector worth hundreds of billions of dollars, led by dollar-pegged tokens such as Tether’s USDT and Circle’s USDC. Payment companies including Visa, Mastercard and Stripe have been building stablecoin settlement, card and merchant tools, while crypto exchanges are positioning stablecoins as a bridge between blockchain networks and traditional finance.

Regulatory scrutiny has also intensified. The United States has moved to place stablecoin issuers under clearer reserve, anti-money laundering and sanctions-compliance requirements, while digital-asset market rules remain under active legislative and supervisory debate. The direction of regulation is broadly supportive of payment stablecoins that maintain liquid reserves and transparent redemption arrangements, but consumer-protection questions remain central as stablecoins enter credit products.

The Coinbase-Cardless model still carries risks that differ from conventional secured cards. USDC is designed to trade at one US dollar, but stablecoins depend on reserves, market liquidity, redemption channels and operational reliability. Customers using secured USDC also face restrictions on access to their funds and may still owe money if liquidation proceeds do not fully cover a card balance, including after disputes, legal orders or adverse account events.