Visa, Mastercard suspend plans to partner with crypto companies in wake of recent crypto collapse and bankruptcies

Since the collapse of stablecoin terraUSD last spring, at least eight crypto companies including FTX filed for bankruptcy in 2022. As the crisis roils the crypto industry, global payments companies are now rethinking their partnerships with crypto companies.

U.S. payment giants Visa and Mastercard have suspended plans to partner with crypto companies following a string of high-profile collapses that shook faith in the industry, Reuters reported, citing people familiar with the matter. The report underscores the risky practices and lack of strict government regulation in the nascent industry.

In addition, the sources, who asked not to be named as talks were confidential, also told Reuters that the two companies have decided to push back the launch of certain products and services related to crypto until market conditions and the regulatory environment improve.

In a statement, a spokesperson for Visa, the world’s largest payment processor, said: “Recent high-profile failures in the crypto sector are an important reminder that we have a long way to go before crypto becomes a part of mainstream payments and financial services.” The spokesperson however added that the current setback in the crypto industry does not change the company’s crypto strategy and focus.

A spokesperson for Mastercard said: “Our efforts continue to focus on the underlying blockchain technology and how that can be applied to help address current pain points and build more efficient systems.”

Another source familiar with the matter also told Reuters that the companies don’t view crypto tokens as a strategic priority in the near term.

“In the near term, we don’t see crypto replacing our core payment and lending services,” an AmEx spokesperson said in an emailed statement, adding that the company continues to explore meaningful use cases for the technology.

“They cannot and should not move ahead until there is a clear regulatory framework,” said Thomas Hayes, chairman and managing member at investment firm Great Hill Capital.

“Delays are not attributable to their core business – as that remains strong. They are related to an uncertain regulatory environment for crypto and demand/interest for crypto services declining in the near term.”

2022 was one of the worst years for the crypto industry. From the beginning of 2022, the crypto sector was faced with the onslaught of terrible news and a massive bloodbath of about $2 trillion in crypto assets wiped out from the crypto market. During the year, we also gruesome bankruptcies of FTX, Terra, Luna, Celsius, and alleged fraud charges against the once sector’s darling and crypto highest-profile entrepreneur, Sam Bankman-Fried.

The number of Americans with a negative view of cryptocurrencies almost doubled, jumping from 25% to 43% following the collapse of FTX. According to the latest CNBC All-America Economic Survey, only 8 percent of the American public has a positive view of cryptocurrencies, down from 19% in March. The same survey found that the number of Americans with a negative view of cryptocurrencies jumped to 43%, up from 25% in March.

However, despite the macro headwinds and trillions of dollars in losses, global crypto adoption remains high at the end of 2022 with more people owning crypto coins than at the beginning of the same year. A new research report by found that the total number of global crypto owners increased in 2022 by 39% up from 306 million in January to 425 million hodlers by December of the same year.