Mastercard, Visa to hold their Crypto horses: Industry Meltdown

• Mastercard and Visa have halted their crypto proceedings due to current market conditions. 
• Everyone awaits a regulatory framework before venturing further into the crypto jungle. 

Cryptocurrencies emerged as the new oil, and everyone ran to get a piece. Being the next financial revolution, traditional banks and financial institutions were trying to upgrade themselves to accommodate crypto. But recent events in the industry, market conditions & regulatory environments made them rethink their strategies. In the wake of similar situations, Visa and Mastercard decided to hold the launches of a few services and products related to crypto. 

An anonymous spokesperson from Visa, the world’s largest payment processor, referring to certain high-profile debacles in the crypto industry, said they were a salient reminder of the long and treacherous road to be trekked by the industry. Meticulous things need to be done to meet the target of mass adoption of crypto into mainstream payments and financial services. 

Although, the spokesperson emphasized that the halt does not change the company’s crypto strategies or focus. 

At the same time, a Mastercard spokesperson said that the company’s efforts are ongoing, and they continue to center their attention and attempts on blockchain technology. Trying to determine how best it can be used to hit certain pain points and build better and more efficient systems. 

Crypto, portrayed as revolutionary in financial sectors, pushed major card firms to gear up and embrace its popularity. This trend almost exploded in counts, with every other firm announcing something for the audience. Some had multiple partnerships with major crypto firms to explore blockchain technology. 

Mastercard joined hands with crypto lending platform Nexo to create the world’s first crypto-backed payment card on April 13, 2022. One-of-a-kind cards were initially available in selected European countries. Once linked to a Nexo-provided crypto-backed credit line, it could be used at 92 million merchants across the globe. 

Before its unfortunate collapse in November 2022, FTX and Visa announced their partnership in October. They had plans to introduce account-linked Visa debit cards across 40 new countries. Both parties were excited about the collaboration, but the collapse followed by bankruptcy proved to be the partnership’s last nail in the coffin. 

American Express also announced its crypto dreams in 2021, touting a possible system where crypto can be used to redeem reward points. However, their spokesperson clarified that they are not looking at crypto tokens as a strategic priority, at least not shortly. However, they would keep exploring the exciting use cases of the technology. 

Chairman and Managing Member at Great Hill Capital, an investment firm, Thomas Hayes, said that major financial institutions should refrain from venturing further into crypto without a clear regulatory framework. Even if there are delays in setting up the regulations, waiting here can be beneficial in the long run. 

Traditional banks and major financial institutions already have a very strong user base. Almost everyone in the world is linked to them somehow. The collaboration of two industries can only benefit the general public and investors as a team-up would require certain regulations and much-required change in the industry. 

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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