- Visa and Mastercard are slamming brakes on respective crypto products and pausing new partnerships.
- A Reuters report published on Tuesday says the payment giants are citing uncertain market and regulatory conditions.
- The companies will however continue to focus on blockchain technology, according to sources.
Visa and Mastercard, the world’s leading payment card companies, have reportedly put brakes on their respective crypto-related products, Reuters reported on Tuesday.
The payment giants are taking this step as a result of the recent turmoil in crypto, particularly following shocking collapses and bankruptcies across the industry as witnessed in 2022.
Other than the market conditions that have derailed confidence, there is a fresh regulatory cloud that currently hangs over the broader crypto sector – factors that now see Visa and Mastercard push back on their plans, sources said.
Visa and Mastercard pause new crypto partnerships
Increased adoption of cryptocurrencies in the payments sector has over the past two years seen Visa and Mastercard take an aggressive approach towards integrating crypto.
The US-based companies have indeed struck numerous partnerships with projects and services across the digital assets space. CoinJournal has indeed highlighted numerous Visa-related news as the company aggressively pursued deals that currently number more than 60 crypto firms, including those with Crypto.com and Nexo.
Earlier this month, as covered here, the payments firm also inked a long-term partnership with crypto payments app Wirex.
Despite this, according to sources, the company has dropped plans for new partnerships as it pushes back on crypto-related products and services. This will be the case until the uncertain regulatory landscape changes.
However, both Visa and Mastercard are not scraping their crypto strategies just yet, people familiar with the developments noted.
Mastercard, for instance, will push forth with its blockchain technology efforts, a spokesperson said. The focus is on how to tap into this underlying technology to build efficient systems and to address existing pain points.
Mastercard announced support for cryptocurrencies on its network in February 2021.
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Visa, the world’s largest payment network, and Mastercard, the second largest, have today announced that they are halting their respective cryptocurrency partnerships amidst market uncertainty.
The two companies have been working on separate cryptocurrency initiatives for some time, but have now decided to put those plans on hold. Visa had been exploring ways to use payment processor BitPay for its Crypto APIs, a secure resource designed to enable businesses to begin accepting cryptocurrency payments, while Mastercard announced earlier this year that it had partnered with Wirex to launch a cryptocurrency-based card.
Despite the halt in crypto partnerships, both companies have indicated that they remain committed to exploring ways to work with digital assets and cryptocurrency. Visa pointed to its own subsidiaries, Visa Fintech and Visa Digital Solutions, as well as its partnerships with Coinbase and Fold, as evidence of its commitment.
Commenting on the matter, Mastercard Chief Executive Officer Ajaypal Singh Banga was quoted by Reuters as saying: “We are no longer working on any of the new crypto projects that are quite immature and don’t yet offer the stability and the robustness in terms of the payments ecosystem that’s needed.”
The halting of the partnerships comes amidst a period of market instability, with the price of Bitcoin and other cryptocurrencies plummeting in recent days. It appears that Visa and Mastercard have taken steps to protect themselves from any ensuing losses.
The move also comes at a time when the regulatory landscape is still unclear, adding extra uncertainty to the mix. Visa Finance and Technology chief executive Jack Forestell noted that the firm is “monitoring cryptocurrency developments in order to understand the implications” and that they “clearly need a regulated environment in order to provide the appropriate protections for consumers and merchants”.
While Visa and Mastercard have halted their cryptocurrency initiatives for the time being, it remains to be seen if and when they will re-explore the space in the future.