By Manya Saini
Feb 28 (Reuters) – U.S. payment giants Visa and Mastercard are suspending plans to forge new partnerships with cryptocurrency firms after a series of high-profile collapses shook confidence in the industry, said to Reuters people close to the news.
The cryptocurrency industry saw a surprising turnaround in 2022, when the bankruptcies of major firms FTX and BlockFi rattled investors and increased regulatory scrutiny of the industry.
Visa and Mastercard have decided to delay the launch of certain cryptocurrency-related products and services until market conditions and the regulatory environment improve, the sources said, asking not to be named because the talks were confidential.
“The recent high-profile failures in the cryptocurrency industry are an important reminder that we still have a long way to go before cryptocurrencies become part of the mainstream of payments and financial services,” a doorman said. -says Visa, the world’s largest payment processor. .
However, this does not change the company’s strategy and approach to cryptocurrencies, the spokesperson added.
A Mastercard spokesperson said that “our efforts continue to focus on the underlying blockchain technology and how it can be applied to help solve current problems and build more efficient systems.”
WITHDRAWAL FROM CRYPTO
Over the past two years, major card companies have moved closer to cryptocurrency as the popularity of this asset class has grown, which some have touted as the next big thing in the world of finance.
The card companies, which pocket a small percentage of the dollar value of the transactions they process, have announced multiple partnerships with cryptocurrency firms and created teams dedicated to exploring blockchain technology.
Mastercard partnered with cryptocurrency lender Nexo in April to launch what it called the world’s first “cryptocurrency-backed” payment card. In November, Visa severed its global credit card agreements with FTX, just a month after announcing an expanded partnership with the exchange.
Card company American Express said in 2021 that it would consider using cryptocurrencies as a possible option for redeeming rewards points in the future. But he does not see crypto tokens as a near-term strategic priority, a source familiar with the matter said.
“In the near term, we do not see crypto replacing our core payment and lending services,” an AmEx spokesperson said in an emailed statement, adding that the company continues to explore cases. important uses for the technology.
(Reporting by Manya Saini in Bengaluru, editing in Spanish by Manuel Farías)