- Mastercard and Visa have decided to distance themselves from Binance due to increasing global regulatory scrutiny on the cryptocurrency exchange.
- Binance faces challenges from financial watchdogs worldwide, including lawsuits from the US Securities and Exchange Commission and the Commodity Futures Trading Commission.
- Binance’s efforts to integrate with mainstream financial systems, such as the Binance Card for everyday expenses, are under threat due to these partnerships ending.
Mastercard and Visa, two of the most recognizable names in the payment card industry, have decided to distance themselves from Binance Holdings, the world’s leading cryptocurrency exchange platform. The move comes amidst increasing global regulatory challenges directed towards the crypto exchange.
A spokesperson for Binance confirmed that Visa has halted the issuance of new co-branded cards with Binance for Europe since July. On the other hand, Mastercard plans to terminate its card partnership entirely with Binance by September. While Mastercard refrained from specifying the reasons behind this decision, Visa has remained silent on the matter.
These decisions by the card giants signify the mounting pressures and hesitations traditional financial systems have towards cryptocurrency platforms, especially those facing legal challenges. Binance’s endeavors to integrate with the mainstream market now face significant setbacks.
Challenges For The Binance Card Program
The Binance Card, which was a strategic move to boost cryptocurrency adoption, is now under threat. Launched in September 2020, this card allowed Binance users to settle everyday expenses using their crypto assets. The discontinuation of Mastercard’s partnership will affect its co-branded card programs in countries like Argentina, Brazil, Colombia, and Bahrain from September 22. Although this decision will impact less than 1% of users in Latin America and the Middle East, it sends a powerful message about the challenges cryptocurrency platforms face in securing trust and collaborations.
Despite these setbacks, Binance remains committed to its vision of a more inclusive financial future powered by cryptocurrencies. The Binance Card was a significant step in this direction. In Argentina, where inflation rates have historically been high, leading locals to seek financial alternatives such as cryptocurrencies, the Binance Card found a receptive audience.
Binance’s Troubled Waters
It’s been a turbulent year for Binance. The platform has undergone increasing scrutiny from financial watchdogs worldwide. The intensified crackdown on the cryptocurrency industry, driven by a series of controversies and scandals in recent times, has not been kind to Binance. Among the most prominent is the lawsuit from the US Securities and Exchange Commission (SEC) against the company and its CEO, Changpeng “CZ” Zhao, for alleged securities rule violations. Additionally, the Commodity Futures Trading Commission has accused Binance of bypassing rules to grant American users access to the exchange. Binance, however, disputes these allegations.
The repercussions of these legal challenges are evident. Binance was cut off from the US banking system earlier in February. By May, it lost the capacity to accept certain bank transfers in Australia. More recently, the exchange opted to discontinue its product “Binance Connect,” which enabled businesses to accept cryptocurrencies through Visa and Mastercard. With Binance’s primary European banking partner poised to withdraw support in September, the future looks uncertain for the crypto exchange in the traditional financial ecosystem.