MasterCard and VISA End Ties With Binance for Crypto Card
Amid the global regulatory crackdown, especially in the United States, key partners of crypto exchange Binance have been breaking ties on their business partnerships.
Last month in July, VISA stopped issuing its co-branded crypto cards with Binance in Europe. Now, another payments processing giant MasterCard will end its partnership with Binance in early September next month.
Mastercard's choice will have repercussions for all four of its co-branded card initiatives with Binance in Argentina, Brazil, Colombia, and Bahrain, effective from September 22, according to a statement from the credit-card company. In response, Binance shared on the X platform (formerly known as Twitter) that the decision will affect fewer than 1% of users in Latin America and the Middle East, and it won't impact Binance accounts globally.
Mastercard clarified that there won't be any consequences for other cryptocurrency card programs. They mentioned that the transition period will enable cardholders to convert any holdings in their Binance wallets.
Mastercard initiated a program to promote broader cryptocurrency adoption, allowing individuals to use crypto assets for their day-to-day expenses. Ethereum, Bitcoin, Dogecoin, and Binance Coin were previously accepted for payments at more than 90 million Mastercard-accepting retail locations.
This action by Mastercard bears significance for its co-branded card programs in various countries. Interestingly, Binance recently discontinued its year-old service, Binance Connect, which enabled cryptocurrency acceptance via Visa and Mastercard.
Amid the high-profile collapses in the crypto space over the last year and the regulatory uncertainty, payment giants have delayed plans to collaborate with the crypto firms. Visa and Mastercard's actions deal another setback to Binance's aspirations for mainstream market presence, highlighting its growing isolation from the conventional financial system.
Binance has faced significant scrutiny from regulatory bodies worldwide, with the pressure escalating due to a broader industry crackdown following a string of incidents and controversies in the past year.
The company and its CEO, Changpeng “CZ” Zhao, have been sued by the US Securities and Exchange Commission for violating securities regulations. Also, the Commodity Futures Trading Commission has filed a lawsuit on the exchange for evading derivatives trading rules. However, crypto exchange Binance has contested these allegations.
Apart from card payment companies, Binance’s banking partners have also distanced themselves from the exchange. Binance experienced a disconnection from the US banking system in February and faced limitations on accepting certain bank transfers in Australia in May.
Recently, Binance made the choice to discontinue Binance Connect, a product introduced a year ago that facilitated businesses' acceptance of crypto through Visa and Mastercard. Additionally, their European banking partner is slated to cease support in September.