Binance-owned Swipe Rolls-out Visa Card that Facilitates Instant Borrowing through DeFi Protocols

Key Highlights:

• Swipe has launched a “LendFi Visa Card”, which enables its users to instantly borrow crypto through DeFi lending protocols
• The card can be requested by U.S. residents through the LendFi app
• For now, only Compound has been integrated with the app and the DeFi-enabled Visa card, but more protocols are expected to be added soon

Swipe, a Binance-owned cryptocurrency debit card provider has rolled out a new Visa card in the U.S. The card is called the “LendFi Visa Card” and allows users to borrow funds from DeFi lending protocols using blockchain technology.

The cards boast with near-instant access to additional liquidity

Swipe’s newly launched “LendFi Visa Card” will utilize major decentralized finance (DeFi) protocols to provide a “near-instant access to lending balances” to its users. In the background, the Visa card communicates with the LendFi app, a decentralized lending platform that connects the borrower with the lender through their mobile devices. The new blockchain-based lending platform is also in charge of approving loans for its users and making sure that they receive the borrowed amount on their accounts. 

For now, the LendFi is only integrated with Compound

At the moment, the platform only supports major DeFi protocol Compound, a spokesperson for Swipe revealed, while more lending protocols are expected to be added soon. In addition, the LendFi App offers a stablecoin aggregator allowing users to deposit funds to their new DeFi-enabled visa in the stablecoin of their choice.

Simple registration process and a 4% cashback

In its announcement Swipe revealed that it cooperated with Marqeta, a California-based payments company, in the development of the DeFi Visa card. The LendFi Visa Cards are currently being virtually-issued to borrowers in the U.S., with an option to request the issuance of a physical card offered later, after completing the registration process. Interested individuals can sign-up to Swipe’s offering simply by downloading the LendFi app and completing identification procedures. All LendFi Visa cards offer a 4% cashback on all purchases. Salman Syed, vice president of business development at Marqeta believes that both companies involved in the making of the card are “remaking the lender-borrower relationship” with it.

While decentralized lending and borrowing services are still one of the most popular use cases of DeFi protocols, decentralized lending is still associated with greater risks than its centralized counterpart. The fact that DeFi lending protocols remove the need for a centralized institution that acts as a middleman between lenders and borrowers is both their pro and con, as removing the trusted middlemen also removes the security that this institution offers to its customers.