Abstract：American payment processing companies, Visa and Mastercard have delayed launching new partnerships with cryptocurrency firms due to the increased regulatory scrutiny in the industry, caused by a series of high-profile bankruptcies.
American payment processing companies, Visa and Mastercard have delayed launching new partnerships with cryptocurrency firms due to the increased regulatory scrutiny in the indUSTry, caused by a series of high-profile bankruptcies. The recent move marks a departure from the warming relations between the payment giants and cryptocurrency firms in the past, as the popularity of cryptocurrencies exploded.
Both companies were exploring options with digital assets, with Mastercard examining payments via USD Coin, and Visa targeting stablecoin settlements in the weeks leading up to the recent development. The decision to delay the launch of certain products and services related to cryptocurrency comes amid an uncertain regulatory environment for the industry in the wake of the collapse and bankruptcies of centralized digital assets custodial firms such as Celsius, FTX, Three Arrow Capital, Voyager Digital, and others within the past year.
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Reports suggest that the delays are not a reflection of the core business of Visa and Mastercard, which sources say remains strong. Instead, the delays have been attributed to the unclear regulatory environment for cryptocurrency. The move comes as a surprise, as both companies have been warming up to the industry for some time, with Visa recently announcing that it would allow the use of the USD Coin to settle transactions on its payment network. Mastercard had also partnered with cryptocurrency firm BitPay to enable its cardholders to transact with cryptocurrency earlier in the year.
In the current uncertain regulatory environment, Visa and Mastercard's decision to delay the launch of new partnerships with cryptocurrency firms is understandable. The collapse of high-profile custodial firms has shaken confidence in the industry, and regulatory bodies are likely to take a more cautious approach to the regulation of digital assets going forward. This caution is likely to have a ripple effect on the industry as a whole, with other companies and institutions also delaying or scaling back their plans related to cryptocurrency.
In conclusion, Visa and Mastercard's decision to halt the launch of new partnerships with cryptocurrency firms highlights the current uncertainty and caution within the industry. The collapse of several high-profile custodial firms has led to increased regulatory scrutiny and caution, which is likely to have a knock-on effect on the industry as a whole. While the cryptocurrency market remains an exciting and potentially lucrative opportunity for many companies, it is clear that caution is needed when approaching the industry, given the risks and uncertainty involved.
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