Reports from anonymous sources suggest that major payment firms Visa and Mastercard have completely suspended their involvement in cryptocurrency ventures. This alleged decision was reportedly taken due to several recent high-profile collapses in the crypto sector, which have led to financial difficulties for many companies offering crypto debit cards. However, Visa's head of crypto, Cuy Sheffield, criticized the story as "inaccurate as it pertains to Visa".
Despite the claims made by the anonymous sources, Visa and Mastercard spokespersons provided statements to a Reuters reporter
that clarified the payment processors' stance on digital currencies. The spokesperson for Visa explained that the failures of some other companies in the crypto sector does not alter the payment processor's cryptocurrency and blockchain strategy.
Meanwhile, the representative for Mastercard stated that the company's efforts continue to focus on the underlying blockchain technology and how it can be applied to help address current pain points and build more efficient systems.
The cryptocurrency industry has experienced several notable collapses and bankruptcies during the past few months, including those of FTX, Celsius, and Blockfi, which issued debit cards that became unusable after their collapse.
However, some partnerships between payment firms and crypto companies still exist, such as the Wirex partnership with Visa announced in mid-February, which seems to openly contradict the Reuters report. Before the collapse of FTX exchange
in late October last year, blockchain.com and Visa had also partnered to release a crypto debit card.
In contrast to the anonymous sources' claims, Visa's head of crypto, Cuy Sheffield, tweeted that the Reuters story was inaccurate regarding Visa's involvement in cryptocurrency partnerships. Sheffield stated that Visa continues "to partner with crypto companies to improve fiat on and off ramps as well as progress on our product roadmap to build new products that can facilitate stablecoin payments in a secure, compliant, and convenient way".
Despite the challenges and uncertainty in the crypto ecosystem, Sheffield's view has not changed that fiat-backed digital currencies running on public blockchains bear the potential to become the future of the payments ecosystem.
The anonymous sources suggest that both Visa and Mastercard have halted their plans to any launch crypto related services until financial regulators across the world establish proper rules and regulations aimed toward avoiding situations like the tragic collapse of FTX last year. However, both Visa and Mastercard's spokespersons provided statements to Reuters which suggest that the payment processors' interest in cryptocurrency and blockchain technology remains intact.
While the failures of some companies in the crypto sector serve as an important reminder of the long way to go before crypto becomes a part of mainstream payments and financial services, both Visa and Mastercard appear to be adapting to the rapidly changing digital payments landscape.
Bitcoin's total market capitalization is worth only $12 billion less than VISA, and is over $100 billion more valuable than Mastercard. In 2022, Visa processed more than $6 trillion in total value, and Mastercard $2.5 trillion, while Bitcoin processed over $8 trillion in the same timeframe. During the DeFi and NFTs boom and crypto bull run in 2021, Ethereum alone processed more than 4.5 times the total value in transactions that Visa did.
Despite regulatory crackdowns by the Securities and Exchange Commission (SEC) on the crypto industry, the value and potential of cryptocurrencies, including Bitcoin and Ethereum, for digital payments remain a topic of discussion and interest for major players in the financial sector.