The well-known American payment processors Visa and Mastercard announced their decision to cease their new relationships with a number of cryptocurrency startups, according to a number of sources. The aforementioned payment processors claim that they reached that conclusion as a result of many recent high-profile business bankruptcies, which enhanced regulatory scrutiny.
According to the payment processors’ announcement, the relationship between large fiat payments that have been progressively infiltrating the market as a result of the rising popularity of digital assets has come to an end. Prior to the disclosure, Visa was known to be pursuing stablecoin settlements weeks before Mastercard was spotted looking into USD Coin.
The two payment processors have reportedly resolved to oppose the introduction of a number of crypto products and services. According to the notification from the relevant payment processors, the abovementioned halt is anticipated to persist until market circumstances and the regulatory environment improve.
As was already indicated, the stop was brought about by the unsteady regulatory climate surrounding cryptocurrencies as a result of the failure and bankruptcies of companies that hold digital assets, like Celsius, FTX, Three Arrows Capital, Voyager Digital, and others, over the last year. In which the Visa spokesman stated that they still have a long way to go before crypto becomes a part of mainstream payments and financial services in light of the recent high-profile failures in the this sector.
Halted Crypto Partnerships
According to reports, the two payment processors have teamed up with Binance, the biggest cryptocurrency exchange platform, to offer payment cards with digital assets and fiat links. Also, it should be recalled that Binance’s cryptocurrency Visa debit card offered teaser cashback to citizens of the European Economic Area back in 2020.
In light of this, Mastercard has teamed up with Binance in order to introduce a prepaid crypto-fiat debit card for Brazilian consumers who meet the standards for know-your-customer authentication. Yet, recent regulatory problems have also involved the relevant exchange platform.
The infrastructure provider Paxos recently declared that it would cease its partnership with Binance due to the launch of the Binance USD stablecoin. Following this announcement, U.S. dollar deposits and withdrawals across Society for Worldwide Interbank Financial Telecommunications channels were temporarily suspended. This was purportedly due to the decision of its banking partner, Signature Bank, to lessen its exposure to cryptocurrencies.
