VISA & Mastercard Rethink Crypto Plans After Market Fallout
During the rise of crypto assets, traditional financial institutions like VISA and Mastercard struggled to get on the trend and announced new initiatives involving Bitcoin, Ethereum or other cryptocurrencies.
Those same companies are now rethinking their strategy after the FTX meltdown and other negative industry events, according to a new report.
Report: VISA and Mastercard Put Crypto Plans on Pause
An unnamed source told Reuters that both VISA and Mastercard had backtracked on plans to launch cryptocentric services until global financial regulators establish clearer controls aimed at avoiding situations like the one that occurred last November involving FTX.
A VISA spokesperson made a reassuring statement that the company’s cryptocurrency strategy will not change, but called the failures of companies such as the aforementioned FTX, BlockFi, Celsius and others “an important reminder” that there is a “long way to go”. way to go before cryptocurrencies become part of mainstream payments and financial services.”
Mastercard did not repeat the same support for cryptocurrency, instead focusing on the underlying blockchain technology. The credit card giant claims that blockchain “will help address current pain points and build more efficient systems.”
Collapses like these are keeping companies away from the nascent industry | TOTAL on TradingView.com
The post-disaster impact on leading payments brands
In the past, these brands have been associated with failed cryptocurrency companies, which could have costly consequences. For example, VISA had credit card arrangements with FTX, and BlockFi issued a Bitcoin rewards credit card that has since become unusable after bankruptcy.
Outside of card partnerships, VISA was eyeing Ethereum as the settlement layer for digital payments. Mastercard has an entire landing page dedicated to explaining in detail how the company approaches “crypto and blockchain”, providing useful statistics that present the positive future potential of cryptocurrencies for digital payments.
The two companies hope to adapt to the rapidly changing digital payments landscape.
Bitcoin and Ethereum: Disrupting Digital Payments
In related news, at $23,500 per coin, Bitcoin’s total market cap is worth just $12 billion less than VISA and is more than $100 billion more valuable than Mastercard.
In 2022, VISA processed more than $6 trillion in total value and Mastercard $2.5 trillion. Meanwhile, Bitcoin processed over $8 trillion in the same period. Last year, while DeFi and NFTs were all the rage, Ethereum processed more than 4.5 times the total amount in transactions that VISA did.