Visa and Mastercard Stop New Crypto Partnerships — Report
According to a Reuters report published on February 28, US payment processors Visa and Mastercard have delayed the launch of new partnerships with crypto firms due to high-profile industry bankruptcies that led to increased regulatory scrutiny. The move follows a period of warmer relations between payments giants and crypto firms as the popularity of cryptocurrencies exploded, while Mastercard explored payments in USD Coin (USDC) and Visa target stablecoin settlement weeks ahead of today’s developments.
Both Visa and Mastercard are said to be pushing back the launch of certain products and services related to crypto until market conditions and the regulatory environment improve. The delays are reportedly due to an uncertain crypto regulatory environment following the collapse and bankruptcies of digital asset custodians, such as Celsius, FTX, Three Arrows Capital, Voyager Digital and others, over the past year. According to a Visa spokesperson:
“Recent high-profile failures in the crypto sector are an important reminder that we have a long way to go before crypto becomes part of mainstream payments and financial services.”
In a tweet written by Cuy Sheffield, chief product officer at Visa, Sheffield says the Reuters report is “inaccurate” and that Visa “continues to work with crypto companies to improve fiat on and off ramps, as well as progress our product roadmap to build new products that can add facilitate stablecoin payments in a secure, compliant and convenient way.”
“Despite the challenges and uncertainties in the crypto ecosystem, our view has not changed that fiat-backed digital currencies running on public blockchains have the potential to play an important role in the payments ecosystem.”
In the past, Visa and Mastercard have both partnered with cryptocurrency exchange Binance to issue crypto-fiat linked payment cards. Since 2020, Binance’s cryptocurrency Visa debit card has been available to residents of the European Economic Area with teaser money. Similarly, Mastercard and Binance said they would launch a prepaid crypto-fiat debit card for Brazilian users who meet the requirements of know-your-customer verification.
The exchange has also been embroiled in regulatory controversies in recent months. On February 13, blockchain infrastructure company Paxos announced that it would end its relationship with Binance over the issuance of the Binance USD (BUSD) stablecoin. On February 8, Binance temporarily suspended US dollar deposits and withdrawals over Society for Worldwide Interbank Financial Telecommunications (SWIFT) channels, citing its banking partner, Signature Bank, and their decision to reduce exposure to cryptocurrency.
Update 28 February 2023 20:50 UTC: Added a statement from Cuy Sheffield, Head of Crypto at Visa.
