US payment giants Visa and Mastercard have decided to delay the launch of certain products and services related to cryptocurrency until market conditions and the regulatory environment improve. The move comes after high-profile bankruptcies of industry majors FTX and BlockFi rattled investors and increased regulatory scrutiny on the sector. Both Visa and Mastercard had announced multiple partnerships with crypto firms and put in place dedicated teams to explore blockchain technology. However, recent events have made the companies more cautious.
“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”, said a spokesperson for Visa, adding that this does not change the company’s crypto strategy and focus.
A spokesperson for Mastercard said: “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”.
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Card company American Express said in 2021 it would consider using crypto as a possible option to redeem reward points in the future. But it is not viewing crypto tokens as a strategic priority in the near term. “In the near term, we don’t see crypto replacing our core payment and lending services”, said an AmEx spokesperson, adding that the company continues to explore meaningful use cases for the technology.
“They cannot and should not move ahead until there is a clear regulatory framework”, said Thomas Hayes, chairman and managing member at investment firm Great Hill Capital. “Delays are not attributable to their core business — as that remains strong. They are related to an uncertain regulatory environment for crypto and demand/interest for crypto services declining in the near term”.