In an unforeseen move, global payment leader Mastercard has terminated its cryptocurrency card collaboration with Binance. A recent Bloomberg publication revealed that this decision will take effect from September 22. It affects crypto card programs in Argentina, Brazil, and Colombia.
The Underlying Reasons for Mastercard
Although Bloomberg’s report remained tight-lipped about the exact causes behind this termination, insinuations abound that heightened regulatory oversight concerning Binance might be the driving force. Indeed, this wouldn’t be the first instance of regulatory pressure on Binance. Recently, regulatory challenges surrounding Binance have gained momentum globally.
Mastercard clarified that this development will not disturb its other existing cryptocurrency card schemes. A grace period has been put in place for cardholders, enabling them to manage and transfer assets from their Binance wallets seamlessly.
Launched just a year ago, the collaborative prepaid crypto card by Mastercard and Binance facilitated users to transact in domestic fiat currencies. It was made possible by leveraging their crypto assets stored on Binance. Originally initiated for Argentinian residents, the alliance expanded earlier this year, introducing another prepaid card offering in Latin America.
Legal Roadblocks for Binance
Binance, alongside its Chief Executive, Changpeng “CZ” Zhao, faces lawsuits from regulatory bodies in the U.S. The U.S. Securities and Exchange Commission has accused the company of breaching local securities regulations. Additionally, the U.S. Commodity Futures Trading Commission has taken issue with Binance for neglecting to register aptly with the regulatory body overseeing derivatives.
Adding fuel to the fire, Binance is currently under the lens of the U.S. Department of Justice. The probe concerns alleged violations about Russian transactions on the platform, seemingly breaching U.S. sanction norms.
Mastercard isn’t navigating these waters alone. Visa, another global payment titan, has also backpedaled from Binance. As of July, Visa ceased to introduce new co-branded cards in association with Binance for the European market, as per reports from Binance.
The rapidly shifting dynamics between financial heavyweights and cryptocurrency platforms, as illustrated by Mastercard and Binance’s recent split, underscores the growing challenges and uncertainties in the crypto realm, especially in light of intensifying global regulatory scrutiny.
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