Nexo Card: Spending Your Crypto Without Selling, Is It Legal?

Imagine being able to pay for your coffee, do your shopping, or finance your vacation with your bitcoins, without ever selling them. That's exactly the promise of the Nexo card and its credit system backed by cryptocurrencies. An attractive idea for any hodler who refuses to part with their digital assets, especially during a bull market.

But behind this innovation lies a crucial question that few users dare to ask: is it really legal in France? And above all, how does the French tax authority view this type of operation? Before diving in headfirst, take a few minutes to understand the tax and legal implications. By the way, if you're unsure between several solutions, our comparator and our savings simulator help you make the right choice right now.

How the Nexo Card Works: The Principle of Crypto Credit

A Loan Mechanism, Not a Sale

The Nexo card works on a radically different principle from classic crypto cards like Binance Card or Crypto.com. Instead of automatically converting your crypto to euros at the time of payment (which triggers a taxable event), Nexo grants you a credit line secured by your digital assets.

Concretely, here's how it works:

• ▸You deposit your cryptocurrencies (BTC, ETH, stablecoins...) into your Nexo account
• ▸Nexo grants you a credit line of up to 90% of the value of your assets
• ▸When you pay with the card, you borrow euros from Nexo
• ▸Your crypto remains untouched as collateral
• ▸You repay whenever you want, with interest

The Apparent Advantages of the System

This system particularly appeals to investors convinced their crypto will continue to appreciate. Why sell today what might be worth double tomorrow?

Nexo Card France: What the Tax Law Really Says

The Tax Framework for Cryptocurrencies in France

In France, cryptocurrency taxation is based on a simple principle: disposal is the taxable event. According to Article 150 VH bis of the French Tax Code, you are taxable when you:

• ▸Sell crypto for euros or another fiat currency
• ▸Exchange crypto for goods or services
• ▸Convert one crypto to another (excluding stablecoins in certain cases)

The tax rate is 30% (flat tax or PFU) on realized capital gains, with an exemption if your annual sales are below €305.

Crypto Borrowing: A Legal Gray Area

Here's the heart of the debate: when you use the Nexo card, you're technically not making a disposal. You're taking out a euro loan, backed by your crypto. This is a fundamental distinction.

Under French tax law, a loan is not taxable income. When you take out a mortgage, you don't pay taxes on the borrowed amount. The same reasoning could apply to crypto loans.

However, several important nuances:

1. 1.The French tax authority has never officially ruled on this type of arrangement
2. 2.The tax regime for crypto is constantly evolving and could be clarified
3. 3.In case of forced liquidation of your collateral (if the price drops), a disposal does occur
4. 4.Interest paid is generally not deductible for individuals

Expert Opinion: Caution Recommended

Several tax lawyers specializing in crypto believe the Nexo arrangement is technically defensible but would carry risks in case of audit. The tax authority could potentially:

• ▸Requalify the operation as abusive if the sole purpose is tax evasion
• ▸Consider collateral posting as a form of disposal
• ▸Apply the principle of economic reality

Our advice: consult a tax lawyer before using this type of solution extensively, especially for significant amounts.

Nexo Card Review: Advantages, Disadvantages, and User Feedback

The Strengths of the Nexo Card

• ▸No transaction fees on payments (0%)
• ▸Cashback up to 2% in NEXO tokens or Bitcoin
• ▸Competitive borrowing rates: from 0% for NEXO token holders
• ▸No traditional credit check (your collateral is enough)
• ▸Mastercard accepted worldwide
• ▸Maintains exposure to the crypto market

Limitations to Know

• ▸Risk of liquidation: if the price of your crypto drops significantly, Nexo can liquidate part of your collateral to cover the debt
• ▸Minimum margin threshold to maintain (loan-to-value or LTV)
• ▸Interest to pay on the borrowed amount if you don't have enough NEXO tokens
• ▸Tax uncertainty in France (as we've seen)
• ▸Dependence on a centralized platform: your crypto is with Nexo, not in your personal wallet

What French Users Say

Feedback on forums and social media is mixed. Recurring positive points concern ease of use and satisfaction at "not having to sell". Main criticisms focus on:

• ▸Anxiety during sharp market downturns (risk of margin call)
• ▸Lack of clarity on the French tax situation
• ▸Interest rates that can increase without NEXO tokens

Spending Crypto Without Selling: Alternatives to Nexo

Solutions Comparison

Nexo isn't the only platform offering this type of service. Here's how it compares to the competition:

Which Solution to Choose?

The choice depends on your priority:

• ▸You absolutely want to keep your crypto → Nexo or other credit solution
• ▸You prefer simplicity and tax clarity → Classic card with automatic conversion
• ▸You want the best cashback → Cards like Crypto.com with staking

To compare all these options according to your personal criteria, use our interactive comparator. In just a few clicks, you can see the differences in fees, cashback, and benefits.

FAQ: Your Questions About the Nexo Card and Taxes

Do I pay taxes if I use the Nexo card?

In principle no, as long as you don't actually sell your crypto. The loan is not a taxable event. However, in case of forced liquidation of your collateral, a disposal occurs and becomes taxable.

What happens if the price of my crypto drops sharply?

Nexo applies a loan-to-value (LTV) system. If the value of your collateral drops too much, you receive alerts to add funds or repay part of the loan. As a last resort, Nexo automatically liquidates a portion of your crypto — which triggers taxation.

Is the Nexo card available in France?

Yes, the Nexo card is accessible to French residents. It's issued as a Mastercard and works wherever Mastercard is accepted.

Do I need to declare my crypto loans on my taxes?

Loans as such don't need to be declared as income. However, you must always declare accounts held abroad (form 3916-bis) if you hold crypto on Nexo, a platform based outside France.

Are interest payments deductible?

For individuals, loan interest is generally not deductible against crypto capital gains. The situation may differ for professionals or in certain specific structures.

Conclusion: Should You Go for the Nexo Card?

The Nexo card represents an interesting innovation for crypto holders who refuse to part with their assets. The credit-backed mechanism theoretically allows you to avoid capital gains taxation, a significant advantage in a bull market.

But beware: this arrangement contains tax gray areas that the French authorities have not yet resolved. Using this solution on a large scale without legal advice would be imprudent. Additionally, the risk of liquidation in case of a market crash should not be underestimated.

Our recommendation? Test with modest amounts, document your transactions, and consult a professional if your holdings become significant. And above all, compare before choosing: each crypto card has its specificities, and the best one for you depends on your investment strategy.

Compare all crypto cards on CryptoCardCompare and find the one that truly matches your investment strategy.