Visa and Mastercard Postpone New Crypto Collaborations Amid Ongoing Regulatory Challenges
In Brief
Visa and Mastercard have decided to delay their partnerships with cryptocurrency companies due to uncertainties in regulations and recent high-profile failures shaking the industry.
Both companies were investigating crypto-related offerings, such as transactions utilizing stablecoins as well as hybrid crypto-fiat payment cards.
The major American payment firms Visa and Mastercard are allegedly placing their plans to team up with cryptocurrency companies on hold, according to a recent Reuters report . This shift comes as a result of a string of prominent failures, including FTX and BlockFi, which have significantly undermined confidence in the crypto market.
Prior to this news breaking, both payment giants were developing increasingly close ties with various cryptocurrency firms. Mastercard had been looking into payment solutions involving USDC, while Visa had been concentrating on settlement processes using stablecoins leading up to this noticeable change in course.
Both payment processing leaders have opted to pause the introduction of new crypto-related offerings until there is a definitive legal and regulatory landscape, together with more favorable market conditions.
“The recent high-profile collapses within the crypto landscape serve as a stark reminder that there is still much progress to be made before cryptocurrencies are fully integrated into conventional payment systems and financial services,”
a spokesperson for Visa told Reuters.
Visa and Mastercard previously joined forces collaborating with crypto exchanges to provide crypto-fiat-linked payment cards. Binance made headlines by launching its cryptocurrency Visa debit card back in 2020, offering cashback rewards for customers in the European Economic Area, while Mastercard partnered with crypto lending platform Nexo in April to develop the first-ever “crypto-backed” payment card.
In 2021, American Express made headlines by announcing its intention to investigate the potential for allowing cryptocurrency to redeem reward points in the future. Nonetheless, the card company does not anticipate crypto to be a significant focus in the near term.
The leading cryptocurrency exchange Binance has also been dealing with regulatory hurdles. On February 13, blockchain infrastructure provider Paxos declared announced it would cease issuing Binance’s BUSD stablecoin following a Wells notice from the SEC and a suspension of issuance orders from the New York Department of Financial Services (NYDFS). Just a few days earlier, on February 8, Binance had to put a temporary halt on US dollar deposits and withdrawals of amounts lower than $100,000 via SWIFT transfers.
Read more:
- Mastercard Embraces Web3 with the Launch of NFT Payment Solutions
- Mastercard joins forces with Binance to enable cryptocurrency transactions at over 90 million retail locations
- Visa Unveils an NFT Initiative for Creators
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