As reported by Bloomberg on Thursday, Mastercard, the global payment giant, will conclude its crypto card collaboration with the world’s largest cryptocurrency exchange, Binance, by next month. The four-year partnership, which provided services to Binance users in Argentina, Brazil, Colombia, and Bahrain, is set to terminate on September 22, as confirmed by an email from a Mastercard spokesperson. Notably, this decision will not affect Mastercard’s other crypto card initiatives, and a transition period will be available for cardholders to convert their holdings within their Binance wallets.
Although the Bloomberg report did not explicitly disclose the reason behind this move, it suggested that the decision might be influenced by heightened regulatory scrutiny of the beleaguered crypto exchange.
The Binance & MasterCard crypto card
The collaboration between Mastercard and Binance through their prepaid crypto card enabled users to transact in local fiat currencies, utilizing their cryptocurrency holdings from the exchange.
Around one year after initiating their partnership, which saw the introduction of a prepaid card for Argentina’s residents, the alliance between Mastercard and Binance is concluding. In early 2023, they expanded their partnership by launching a prepaid card in Latin America.
The cessation of this partnership is a response to the renewed regulatory challenges Binance has been facing globally. Notably, a Mastercard spokesperson has confirmed that this conclusion won’t impact any of Mastercard’s other crypto card initiatives. The payment platform’s website still highlights partnerships with other cryptocurrency exchanges, including Gemini.
Issues with Binance
In the previous week, we highlighted the announcement by the largest cryptocurrency exchange, Binance, regarding discontinuing its regulated buy-and-sell crypto division, Binance Connect. A spokesperson from Binance explained that the decision to shut down Binance Connect resulted from the company’s routine assessment of its range of products and services.
Binance Connect facilitated crypto payments for merchants. Still, soon after its closure, the customer support team communicated on social media that the crypto-backed debit card service in Latin America and the Middle East would also be discontinued.
Binance has encountered a challenging year, grappling with legal and regulatory complexities. In June, the crypto exchange and its CEO, Changpeng Zhao, were sued by United States regulators, who alleged the operation of a “web of deception.”
Furthermore, the US Commodity Futures Trading Commission filed a lawsuit against Binance, citing inadequate registration with the regulatory body. Concurrently, Binance faces scrutiny from the United States Department of Justice, investigating the exchange for permitting Russian users to access its services in violation of US sanctions.