Following a string of high-profile collapses including the bankruptcy of FXT and BlockFi, that shook faith in the crypto industry, global payment giants, Visa and Mastercard are stalling their plans of partnering with crypto firms.
Thus, both Visa and Mastercard have decided to push back the launch of certain products and services related to crypto until market conditions and the regulatory environment improve, a Reuters report stated.
“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,” a spokesperson for Visa said.
Visa’s spokesperson, however, noted that, it does not change the company’s crypto strategy and focus. Also, a spokesperson for Mastercard said: “our efforts continue to focus on the underlying blockchain technology and how that can be applied to help address current pain points and build more efficient systems.”
In recent years, major card firms had warmed up to crypto as the popularity of the asset class exploded, with some touting it as the next big thing in finance.
Card companies, which pocket a small percentage of the dollar value of transactions they process, had announced multiple partnerships with crypto firms and put in place dedicated teams to explore blockchain technology.
In April last year, Mastercard teamed up with crypto lender Nexo to launch what it called the world’s first “crypto-backed” payment card. Last year November, Visa had severed its global credit card agreements with FTX, just a month after announcing an expanded partnership with the exchange.
Chairman and managing member at investment firm Great Hill Capital, Thomas Hayes, while commenting, said: “they cannot and should not move ahead until there is a clear regulatory framework. Delays are not attributable to their core business – as that remains strong. They are related to an uncertain regulatory environment for crypto and demand/interest for crypto services declining in the near term.
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