Uphold has launched a new payment product for XRP holders. Eligible users in certain U.S. states can use their XRP as collateral to obtain a credit line and make everyday purchases via the Visa network without having to sell their tokens first.
Integrated with DeFi lending
The Exa credit card, launched by Uphold, is powered by the DeFi lending platform Exactly Protocol. The product was introduced by Nancy Beaton, President of Uphold U.S. Users lock up XRP as collateral to receive a spending limit, which can be used for shopping, travel, dining, online payments, and other everyday expenses.
Use collateralized borrowing instead of selling your coins.
The logic of this product is similar to traditional asset-backed loans. Instead of selling their assets, holders use them as collateral to obtain liquidity. For XRP holders, this means retaining exposure to future price movements of the token while still accessing cash or credit when needed.
If the loan is repaid as agreed, the pledged XRP remains the user's property. Uphold also positions this product as a tool that allows users to hold XRP while unlocking spending power, aiming to extend the use of crypto assets beyond trading to more everyday financial applications.
Available only to users in certain states
Currently, this service is only available to eligible users in certain states in the United States. The article notes that borrowing rates, repayment terms, and eligibility criteria may vary depending on the user’s situation and location.
Exa Credit Card also offers more flexible repayment options. Users can choose a repayment schedule that suits their financial situation, rather than having to immediately sell their crypto assets to cover expenses. This design is better suited for users who wish to hold XRP long-term but need liquidity at certain intervals.
Price fluctuations in the asset pose a risk of additional collateral requirements.
However, XRP collateralized lending is not without risk. Due to XRP’s high price volatility, a significant drop in price may reduce the collateral coverage ratio, potentially triggering a margin call or other provisions outlined in the loan agreement.
The article also mentions that another payment platform, RedotPay, is expanding its XRP payment capabilities, with services now available to over 7 million users. As more platforms attempt to integrate crypto assets into consumer and payment systems, similar products are evolving from mere holding and trading to more concrete use cases for fund utilization.