Visa and Mastercard Pull out from Crypto Ecosystem

After a series of high-profile breakdowns damaged confidence in the sector, individuals with knowledge of the circumstances told Reuters that U.S. payment titans MasterCard and Visa were halting plans to develop new relationships with crypto businesses. As big players, FTX and BlockFi declared bankruptcy in 2022. It sent shockwaves across the investment community and drew the attention of regulators. Those familiar with the matter stated that Mastercard and Visa have chosen to delay the release of some crypto-related services and goods until market circumstances as well as the regulations improve.

Visa and Mastercard Prioritize Crypto Research while Maintaining a Traditional Finance Focus

A representative for Visa, the largest payment processor in the world, recently stated that previous high disasters in the cryptocurrency industry are a useful reminder. There is still a long way to go before crypto becomes an integral component of conventional financial and payment services.

The company’s cryptocurrency strategy and priorities have not changed as a result of this, the representative stressed. Mastercard has stated, the¬†efforts keep concentrating on the fundamental cryptocurrency. And how that may be utilized to assist address present problem areas and build a better effective system. Major credit card companies attitudes towards cryptocurrencies shifted in the previous few years. As a result, the asset class’s popularity soared and some predicted it would become the new big thing in business.

Credit card companies, which make money by keeping a small cut of all the payments they process, have formed several relationships with cryptocurrency companies. They established research teams to investigate blockchain-based technology. In April, Mastercard and cryptocurrency lender Nexo introduced what they claimed to be the first cryptocurrency-backed card in the world.

After announcing deeper cooperation with FTX in October, Visa abruptly ended all international credit card contracts in November.

American Express Explores Crypto for Rewards, but Not a Priority

In 2021, American Express indicated that it would explore accepting cryptocurrency as payment for reward points. The sources who are familiar with the scenario stated that crypto tokens are not now seen as a key imperative.

Tom Hayes, head and controlling member at investment company Great Hill Capital, stated they can’t and shouldn’t proceed unless there is a defined set of regulations. Their delays have nothing to do with the health of their business model, which is doing well. These are associated with the falling demand for and excitement in cryptocurrency services and the ambiguous cryptocurrency regulatory landscape.