According to sources, Visa and Mastercard will delay the launch of new blockchain partnerships until market conditions improve and a clearer regulatory framework is established.
According to a Reuters report published on Feb. 28, American payment processors Visa and Mastercard have delayed the launch of new partnerships with crypto firms due to high-profile bankruptcies in the industry that led to increased regulatory scrutiny. The move follows a period of warming relations between payment giants and crypto firms as the popularity of cryptocurrencies exploded, with Mastercard exploring payments in USD Coin USDC $1.00 and Visa targeting stablecoin settlements weeks before today’s development.
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 regulatory crypto environment following the collapse and bankruptcies of digital asset custodial firms, such as Celsius, FTX, Three Arrows Capital, Voyager Digital and others, within the past year. According to a spokesperson at Visa:
“Recent high-profile failures in the crypto sector are an important reminder that we have a long way to go before crypto becomes a part of mainstream payments and financial services.”
In a tweet written by Cuy Sheffield, head of product at Visa, Sheffield says that the Reuters report is “inaccurate” and that Visa “continue to partner with crypto companies to improve fiat on and off ramps as well as progress on our product roadmap to build new products that can facilitate stablecoin payments in a secure, compliant, and convenient way.”
“Despite the challenges and uncertainty 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.”
Previously, Visa and Mastercard 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 cashbacks. Similarly, Mastercard and Binance said they would launch a prepaid crypto-fiat debit card for Brazilian users that pass know-your-customer verification requirements.
The exchange has also become embroiled in regulatory controversies in recent months. On Feb. 13, blockchain infrastructure company Paxos announced it would end its relationship with Binance over the issuance of its Binance USD (BUSD) stablecoin. On Feb. 8, Binance temporarily suspended U.S. dollar deposits and withdrawals over Society for Worldwide Interbank Financial Telecommunications (SWIFT) channels, citing its banking partner, Signature Bank, and their decision to reduce cryptocurrency exposure.
Update Feb. 28, 2023 20:50 UTC: Added a statement from Cuy Sheffield, head of crypto at Visa.