Visa and Mastercard have decided to wind down their partnerships with crypto firms due to the current state of the crypto industry. The decision comes in the context of last year’s high-profile collapses such as FTX and BlockFi, which concerned investors and spurred a worldwide regulatory effort.

As a result, certain Visa and Mastercard product launches have been pushed back until crypto market conditions have stabilised. Visa representatives cited by Reuters mentioned the recent high-profile failures in the crypto sector and emphasised how they acted as a wake-up call and proved that crypto has a long way to go before it can become a part of mainstream payments. Mastercard officials cited by the same source revealed that the company is working on underlying blockchain technology and is exploring its applications to help address current pain points while building more efficient systems.

Visa and Mastercard partnerships in the crypto sector Before the aforementioned collapses, crypto’s popularity was on an ascending trend, and many card companies had announced partnerships with crypto firms while organising teams to explore new potential uses of blockchain technology. For instance, Mastercard partnered with Nexo in April 2022 in order to launch a co-branded crypto-backed payment card. The Nexo card is designed for those who are passionate about investing in and trading with cryptocurrencies and comes both in a digital and a physical form.

The virtual card can be activated by linking it to either a Google Pay or an Apple Pay account, and it can be used to purchase goods just like a regular credit card, with the user’s available cryptocurrencies used as collateral. The card offers free ATM withdrawals and does not charge users any monthly, annual, or inactivity fees, as some might experience when joining a crypto trading or exchange platform. However, there is an interest rate attached to the credit with rates arbitrarily determined by Nexo In November 2022, Visa terminated its global card agreements with FTX just a month after it announced the expansion of its partnership with the company.

Visa and FTX planned to introduce account-linked Visa debit cards in 40 new countries prior to this announcement. According to Reuters, Visa representatives described the situation with FTX as ‘unfortunate’ at the time, and they revealed that they were monitoring the company’s developments closely. Reuters also reported that, in 2021, card company American Express considered using crypto as a possible option to redeem reward points in the future.

However, the company has reconsidered and is not viewing crypto tokens as a strategic priority in the near future. .