Mastercard, the global payment giant, is set to terminate its cryptocurrency card partnership with Binance, a prominent crypto exchange, next month, as reported by Bloomberg. While the exact reason for this decision was not disclosed, there are implications that it might be influenced by the heightened regulatory scrutiny surrounding the embattled crypto exchange.
According to Bloomberg’s report, Mastercard and Binance will cease their four crypto card programs in Argentina, Brazil, and Colombia starting from September 22. This move is significant and indicates a shift in the crypto card landscape.
However, Mastercard has reassured that the conclusion of this partnership will not affect its other cryptocurrency card initiatives. During the wind-down period, cardholders will have the opportunity to convert their crypto holdings within their Binance wallets.
The Mastercard and Binance prepaid crypto card was designed to enable users to conduct transactions in local fiat currencies, funded by their cryptocurrency assets held on the exchange. This collaboration initially began around a year ago when Binance and Mastercard joined forces to introduce a prepaid card for residents of Argentina. In early 2023, the partnership expanded to include another prepaid crypto card targeting Latin American users.
The timing of this termination seems to be closely related to the resurgence of regulatory issues surrounding Binance on a global scale. As previously reported, Binance and its CEO, Changpeng “CZ” Zhao, faced legal action from the United States Securities and Exchange Commission for alleged violations of local securities laws. Additionally, the U.S. Commodity Futures Trading Commission filed a lawsuit against Binance for its alleged failure to properly register with the derivatives regulator.
Notably, Binance has also been under investigation by the U.S. Department of Justice for reportedly allowing Russian nationals to use the exchange in violation of U.S. sanctions.
In a twist of fate, it appears that Mastercard isn’t the only company distancing itself from Binance in light of these regulatory challenges. Visa has reportedly stopped issuing new co-branded cards in partnership with Binance in Europe as of July, according to statements from Binance itself.
This evolving situation underscores the complex and ever-changing regulatory landscape surrounding the cryptocurrency industry, impacting both crypto exchanges and their partnerships with major financial institutions.