Visa, Mastercard reportedly halting cryptocurrency partnerships and product plans following industry meltdown last year
Payment card companies Visa and Mastercard are reportedly pushing back plans to introduce cryptocurrency-focussed products and services following last year’s high-profile collapses of a number of major players in the market.
The dominant payment firms are halting plans to seal new partnerships with crypto firms, Reuters reported, citing unnamed sources.
The pause on crypto-related plans will continue until the companies see improvements in market conditions and the regulatory environment, the report said.
Last year saw the bankruptcies of major crypto ventures including exchange FTX and so-called stablecoin TerraUSD, among others.
Last year both Visa and Mastercard were pushing ahead with crypto partnerships and were working toward eventually being able to provide payment cards similar to debit cards, but funded by crypto.
A Wall Street Journal report last July cited unnamed sources as saying the companies were partly concerned about getting shut out of an emerging payments system, and partly looking to tap into a field in which they saw growing demand.
The report cited Cuy Sheffield, global head of crypto at Visa, as saying the company was continuing its investment plans because it was “seeing continued interest from our existing clients and new developers coming into the space”.
Mastercard worked with crypto lender Nexo in April to launch what it called the first “crypto-backed” payment card, while Visa had worked with FTX but severed the relationship in November after the crypto exchange’s collapse.
Visa took a measured tone in its comments this week, saying in a statement that there was a “long way to go” before crypto becomes mainstream.
“Recent high-profile failures in the crypto sector are an important reminder that we have a long way to go before crypto becomes a part of mainstream payments and financial services,” Visa said in a statement.
It added that the company’s crypto strategy and focus remained unchanged.
Mastercard said its efforts “continue to focus on the underlying blockchain technology and how that can be applied to help address current pain points and build more efficient systems”.
American Express said in a statement it doesn’t “see crypto replacing our core payment and lending services” in the near term.