VISA and Mastercard Rethink Crypto Plans After Market Fallout
During the inception of crypto-assets, traditional financial institutions such as VISA and Mastercard tried to get in on the trend and announced new initiatives involving Bitcoin, Ethereum or other cryptocurrencies.
The same companies are now reassessing their strategy in the wake of the FTX collapse and further negative industry events, according to a new report.
Report: VISA & Mastercard put crypto plans on hold
An anonymous source told Reuters that both VISA and Mastercard have backed off plans to launch crypto-centric services until global financial regulators establish clearer controls aimed at avoiding situations like the one that unfolded last November with FTX.
A VISA spokesperson made a reassuring statement that the company’s cryptocurrency strategy will not change, but called the failures of companies such as FTX, BlockFi, Celsius and others “an important reminder” that there is a “long way to go before crypto “. becomes part of regular payment services and financial services.”
Mastercard didn’t quite replicate the same support for cryptocurrency, instead focusing on the underlying blockchain technology. The credit card giant claims that blockchain will “help address current pain points and build more efficient systems.”
Collapses like these are keeping companies away from the nascent industry | TOTAL on TradingView.com
The post-fallout impact on top payment brands
These brands have been associated with failing cryptocurrency businesses in the past, which can have costly consequences. For example, VISA had credit card agreements with FTX, and BlockFi issued a Bitcoin back rewards credit card that has since become unusable after bankruptcy.
Outside of card partnerships, VISA had been eyeing Ethereum as a digital payment settlement layer. Mastercard has an entire website dedicated to explaining in detail how the company approaches “crypto and blockchain”, providing useful statistics that present the positive future potential of cryptocurrencies for digital payments.
The two companies hope to adapt to the rapidly changing digital payment landscape.
Bitcoin and Ethereum: disrupting digital payments
In related news, at $23,500 per coin, Bitcoin’s total market cap is just $12 billion less than VISA, and is worth more than $100 billion more than Mastercard.
By 2022, VISA processed more than $6 trillion in total value and Mastercard $2.5 trillion. Meanwhile, Bitcoin processed over $8 trillion in the same time frame. The year before while DeFi and NFTs were all the rage, Ethereum processed more than 4.5 times the total value in transactions that VISA did.
