US payment giants Visa and Mastercard have delayed launching new partnership programs with cryptocurrency firms due to high-profile bankruptcies in the industry. They were frightened by the scrutiny of regulators, reports Reuters.
Both Visa and Mastercard have made the decision to delay the launch of crypto-related products and services until market conditions improve and the regulatory framework is in place to regulate the market in the United States. The bankruptcy of such serious comrades as Celsius, FTX, Three Arrows Capital, Voyager Digital, and others has stifled the appetite of payment companies.
A Visa spokesperson explained the decision: “The recent major scandals in the crypto industry are an important reminder that we have a long way to go before crypto becomes part of traditional payments and financial services.”
Kai Sheffield, head of products at Visa, says the Reuters article doesn’t quite match the reality. Visa continues to partner with crypto companies to create new products that can facilitate stablecoin payments, he said.
Despite the problems and uncertainty in the crypto ecosystem, our opinion about it has not changed. Fiat-backed digital currencies running on public blockchains can play an important role in the payments ecosystem.
Visa and Mastercard partnered with cryptocurrency exchange Binance to issue payment crypto cards. Since 2020, Binance’s cryptocurrency Visa debit card has been available to residents of the EU. Mastercard and Binance announced the launch of a crypto card for users in Brazil. The exchange has been embroiled in conflicts with regulators. In mid-February, BUSD stablecoin issuer Paxos announced the end of its relationship with Binance. On February 8, Binance temporarily suspended US dollar deposits and withdrawals via SWIFT, citing issues with partner Signature Bank and their decision to mitigate the risk of using cryptocurrencies.
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