Visa and Mastercard have temporarily suspended their plans to form partnerships with cryptocurrency firms following a series of high-profile failures in the industry. The payment giants have decided to delay the launch of certain crypto-related products and services until the market conditions and regulatory environment improve.
Crypto Industry Suffers After Major Bankruptcies
The cryptocurrency industry has seen a significant downturn in fortunes following the bankruptcies of major companies FTX and BlockFi. These events have caused investors to lose faith in the sector and have led to increased regulatory scrutiny.
Visa and Mastercard Continue Focus on Crypto Strategy
Despite the partnership pause, Visa and Mastercard remain committed to their crypto strategy. Visa, the world's largest payment processor, stated that the recent failures in the sector are a reminder of how far the industry has to go before it becomes a mainstream part of payments and financial services. Meanwhile, Mastercard focuses on the potential applications of blockchain technology and how it can help address current issues and build more efficient systems.
Card Companies Warm Up to Crypto
Over the past few years, major card firms have shown increasing interest in cryptocurrency as the asset class gained popularity. Some companies, including Mastercard, announced partnerships with crypto firms and established dedicated teams to explore blockchain technology. American Express also stated that it would consider using crypto to redeem reward points in the future.
Uncertain Regulatory Environment Delays Crypto Adoption
A clear regulatory framework for cryptocurrency has caused delays for major card companies. Companies such as Visa and Mastercard must have a regulatory environment for crypto to move forward with their crypto plans. Meanwhile, American Express views crypto as something other than a near-term strategic priority.