After a series of high-profile collapses shook the crypto industry, U.S. payment giants Visa and Mastercard are putting a pause on plans to get into new partnerships with crypto companies, people familiar with the situation told Reuters.
Pull back on digital money
In 2022, the crypto industry underwent a startling turnabout in fortunes as the failure of crucial players FTX and BlockFi alarmed investors and caused increased government scrutiny of the industry.
According to the individuals, who requested anonymity since the discussions were private, Visa and Mastercard have both chosen to delay the introduction of specific products and services connected to cryptocurrency until the market and the legal environment improve.
A spokesperson for Visa, the largest payment processor in the world, said recent high-profile failures in the crypto sector are a crucial reminder that there is still a long way to go before crypto is used in mainstream payments and financial services.
Card Companies and Crypto
Major card companies had become interested in crypto over the previous years as the asset class’s popularity skyrocketed. Some predicted it would be the next big thing in finance.
Card companies keep a small portion of the dollar worth of transactions they handle and have several relationships with crypto companies and devoted teams investigating blockchain technology.
Less than a month after announcing an extended collaboration with the exchange in November, Visa terminated its global credit card agreements with FTX. American Express, a credit card firm, stated in 2021 that it would consider crypto as a potential alternative for reward point redemption in the future.
However, according to a source with knowledge of the situation, it does not currently consider crypto tokens a strategic priority.
According to an AmEx spokesperson who responded to a request for comment via email, “in the short term, we don’t anticipate crypto displacing our core payment and lending services.” They added that the corporation is still looking into practical applications for the technology.