After a succession of high-profile catastrophes damaged confidence in the industry, U.S. payment giants Visa and Mastercard are putting the brakes on efforts to form new relationships with crypto businesses, people familiar with the situation told Reuters.
The bankruptcy of industry titans FTX and BlockFi alarmed investors and heightened governmental scrutiny on the sector in 2022. As a matter of fact, a shocking turn of events followed for the cryptocurrency business.
According to the people, who declined to be identified because the discussions were private, Visa and Mastercard have both chosen to delay the introduction of a few cryptocurrency-related products and services until the market and the regulatory environment have improved.
Meanwhile, a representative for Visa, the largest payment processor in the world, stated that recent high-profile failures in the crypto industry were an important reminder that there was still a long way to go before crypto becomes a part of mainstream payments and financial services.”
In addition, the representative said that this did not alter the organization’s aim and strategy regarding cryptocurrencies.
“Our efforts continue to focus on the underlying blockchain technology and how that can be in use as a leverage to help address current pain points and build more effective systems,” a Mastercard representative said.
However, major card companies had begun to embrace cryptocurrency during the previous few years as the asset class’s popularity skyrocketed and some predicted it would be the next big thing in finance.
Besides, card companies, who receive a small cut of the dollar value of the transactions they handle, had a number of relationships with cryptocurrency companies and specialized teams investigating blockchain technology.
In fact in April, Mastercard and cryptocurrency lender Nexo introduced the “world’s first” payment card that was “backed by cryptocurrency.”
Nevertheless, just one month after announcing an expanded collaboration with FTX, Visa terminated its global credit card partnerships with the exchange in November.
