FTX and BlockFi bankruptcies spook Visa and Mastercard
Payment processors Mastercard and Visa say they have no plans to alter their crypto strategies despite delaying plans to forge new relationships in the industry, following the high-profile collapses of a number of prominent firms.
As reported by Reuters, the spectacular implosions of companies including FTX and BlockFi have led to the financial giants pumping the brakes on a number of crypto-related products and services. According to anonymous sources close to the matter, the delays will remain in place “until market conditions and the regulatory environment improve.”
Faith in crypto markets was badly shaken last year amid a raft of company bankruptcies and well-publicized regulatory crackdowns.
“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,” a Visa spokesperson said (via Reuters).
They added that this recent decision doesn’t affect the firm’s crypto strategy.
Likewise, Mastercard told Reuters, “Our 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.”
Read more: Visa just used the Ethereum blockchain to settle a stablecoin payment
Crypto looks to be losing its shine
Cryptocurrency had until very recently, been flavor of the month among card and payment companies.
Indeed, prior to this recent row-back, a number of the sector’s biggest players had announced glossy partnerships with crypto firms. These included Nexo and Mastercard planning the world’s first crypto-backed payment card, and crypto payments platform Wirex inking a long-term global partnership with Visa.
However, since then, not only has Visa adopted this cautious new approach, it has called time on its credit card partnership with Sam Bankman-Fried’s now-bankrupt FTX. American Express looks to be following suit and has said that in the near term, it “doesn’t see crypto replacing its core services.”
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