Mastercard and Visa, two of the biggest payment firms around the world, have stopped their strategy to collaborate with the crypto companies. This is being witnessed after several high-profile crashes in the crypto industry and elevated regulatory scrutiny. The firms have determined to procrastinate releasing several crypto-related services and products till improvement is witnessed in the regulatory environment and market conditions.
Mastercard and Visa’s Crypto Plans Witness a Stop after a Meltdown in the Industry
Reuters recently published a report on this and elaborated on the reasons that are credited for this condition. The crypto market saw an astonishing decline back in the year 2022, especially after the bankruptcies of prominent industry players, including BlockFi and FTX. The respective events resulted in huge losses for the investors.
In previous years, both Mastercard and Visa took several endeavors related to the crypto space as this world had grasped a lot of attention, with some promoting it as the future of finance. Both payment giants carried out several collaborations with companies operating in the crypto world. Along with this, they also made teams devoted to delving into blockchain technology.
Before the collapse of FTX, Visa expanded its collaboration with the payment platform. However, the respective partnership could not hold for long. In the meantime, Mastercard gathered considerable attention by introducing the earliest crypto-compatible payment card in partnership with Nexo (a crypto-lending firm).
Also read:Even then, the recent incidents in the industry were unfortunate for them, as was the case with the other prominent platforms. As a result of this, both entities have been compelled to exit the crypto market and look for an elucidated regulatory agenda. A spokesperson from Visa remarked on the current situation and the move taken by the platform to tackle it.
Increasing Regulatory Concerns and Slumping Crypto Interest Deters Payment Entities
The spokesperson stated that the recent big failures that happened around the world of cryptocurrencies are significant to clarify one thing that the crypto sector is even now going through its initial phase. As per the spokesperson, a long wait is required for crypto to participate in mainstream financial as well as payment services.
A spokesperson from Mastercard disclosed that the platform is making great endeavors to keep on providing adequate attention to the fundamental blockchain technology. In addition to this, the company will also try to explore the potential of the respective technology to assist in coping with the present vulnerabilities as well as developing additional effective systems.
American Express (an entity developing payment cards) mentioned that it would consider utilizing the crypto assets as a likely option for exchanging reward points at some time. However, the firm does not think digital assets to be a strategic priority for it in the coming time. A spokesperson belonging to AmEx revealed that the firm keeps on discovering beneficial use cases for the respective technology.
Nonetheless, the spokesperson pointed out that the uncertain regulatory environment in the crypto sector is responsible for the delays. In addition to this, the other hindering things take into account the decreasing interest/demand rate for crypto-related services.
Thomas Hayes, the managing member and chairman at Great Hill Capital (an investment company), also commented on this scenario. As per him, they need to have an explicit regulatory agenda in advance of entering the respective sector for another time.
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