US payments giants Visa and Mastercard are shedding plans to forge new partnerships with crypto firms after a series of famous crashes shook confidence in the industry, people familiar with the matter said. with the matter told Reuters.
The crypto industry has seen an incredible reversal of fortunes in 2022 as the bankruptcy of major industry players FTX and BlockFi worries investors and intensifies regulatory scrutiny of the cryptocurrency industry. this field.
Both Visa and Mastercard have decided to push back Unnamed requesters said the negotiations were confidential.
A spokesperson for Visa, the world’s largest payment processor, said: “The recent famous failures in the crypto space are an important reminder that we have a long way to go. before cryptocurrencies become part of mainstream financial services and payments.”
However, that doesn’t change the company’s crypto strategy and focus, the spokesperson added.
A Mastercard spokesperson said: “Our efforts continue to focus on the underlying blockchain technology and how to apply that technology to help solve today’s difficult problems and build new systems. more effective.”
Withdrawal of Cryptocurrencies
Over the past few years, major card companies have become interested in cryptocurrencies as the asset class’s popularity has exploded, with some seeing it as the next big thing in finance.
Card companies, pocketing a small percentage of the dollar value of the transactions they process, have announced numerous partnerships with crypto companies and set up dedicated teams to explore blockchain technology.
Mastercard partnered with crypto lender Nexo in April to launch what it calls the world’s first “crypto-backed” payment card.
In November, Visa severed its global credit card deals with FTX, just a month after it announced an expanded partnership with the exchange.
card company American Express said that in 2021 it will consider using cryptocurrency as a possible option to redeem points in the future.
But it does not view crypto tokens as a strategic priority in the near term, a source familiar with the matter said.
An AmEx spokesperson said in an emailed statement: “In the near term, we do not see cryptocurrencies replacing our core lending and payment services.”
“They cannot and should not move forward until a clear regulatory framework is in place,” said Thomas Hayes, chairman and managing partner of investment firm Great Hill Capital.
“The delay is not due to their core business – because that is still going strong. They are related to the uncertain regulatory environment for cryptocurrencies and the demand/interest for crypto services will decrease in the near term.”
