Local newspaper La Nacion reported on Wednesday that Argentine cryptocurrency exchange Limón has launched a Bitcoin-backed Visa credit card.
Lemon is the second largest cryptocurrency exchange in Argentina, serving over 5.5 million users. The new Bitcoin-backed Visa credit card makes it possible to obtain peso financing without the need to sell or transfer Bitcoin balances.
“We created an easy way to get credit in pesos using Bitcoin as collateral, without the need for credit history,” Marcello Cavazzoli, founder and president of Lemon, said in an official statement.
The product launch is the first step in its development process, through simple mechanisms and a fixed quantity.
How does a Bitcoin-backed Lemon credit card work?
According to what the company announced, in its first phase the product works with a simple mechanism and fixed amounts: the user deposits 0.01 Bitcoin as collateral (currently the equivalent of around $900) and then receives a peso credit card with a predefined limit of 1,000,000 Argentine pesos. Thus, Bitcoin remains frozen as collateral and is neither sold nor converted into the local currency.
In the next step, users will be able to determine the guarantee amount and credit limit themselves. Lemon is also working on a solution that allows dollar-denominated purchases to be paid directly through the “digital dollar” using stablecoins such as USDC and USDT.
User benefits
Lemon confirmed that credit card users will benefit from commission-free purchases of digital dollars, Bitcoin, Ethereum and more than 30 cryptocurrencies. Additionally, exclusive benefits include early access to new features, a newsletter with market insights, and a portfolio summary.
The company noted that Rootstock would waive card maintenance for the first three months, and after that, 7,500 pesos per month ($5) would be waived for users who purchase more than $150 worth of cryptocurrencies per month.
The company added that Bitcoin is the asset most held as savings by Lemon users in Argentina, ahead of the dollar and the peso, and that the objective of this card is to transform this savings into a financial instrument for daily use.
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