U.S. credit card giants %Visa ($V) and %Mastercard ($MA) are halting their %Cryptocurrency payments and partnerships after a string of high-profile failures have rocked the global industry.
The Reuters News Agency is reporting that both Visa and Mastercard have decided to put on hold the launch of several crypto-related products and services until market conditions and the regulatory environment improves.
The change in direction comes after the high-profile collapse last November of the FTX cryptocurrency exchange, which filed for bankruptcy citing $8 billion U.S. in losses and nearly one million creditors.
At the same time, the U.S. Securities and Exchange Commission (SEC) has ramped up enforcement measures related to cryptocurrency lenders and exchanges.
The SEC, in particular, has been targeting %Stablecoins that are cryptocurrencies tied to another asset, typically the price of gold or the U.S. dollar.
Over the last few years, credit card firms such as Visa and Mastercard had been pushing into
crypto and digital payments as the popularity of the asset class grew around the world.
Both Visa and Mastercard, which pocket a percentage of the dollar value of transactions they process, had announced multiple partnerships with cryptocurrency firms and put in place dedicated teams to take advantage of blockchain technology.
Credit card company %AmericanExpress ($AXP) said in 2021 that it would consider using cryptocurrencies as a possible option to redeem reward points in the future, but had not moved into crypto as forcefully as either Visa or Mastercard.
While Visa and Mastercard continue to say publicly that blockchain technology remains a strategic priority for their businesses, they are now moving away from crypto in the near-term, according to the Reuters report.
Visa’s stock has gained 2% over the last 12 months to trade at $220.35 U.S. per share. Mastercard’s stock has declined 2% in the same period to trade at $355.48 a share.