Mastercard Ends Binance Crypto Card Partnership Amidst Regulatory Shifts
The colossal financial enterprise Mastercard has chosen to terminate its partnership involving cryptocurrency cards with the Binance cryptocurrency exchange, as conveyed to Cointelegraph on the 25th of August.
In a communication from a Mastercard representative, it was disclosed that Mastercard and Binance are discontinuing their collaborative cryptocurrency card initiatives in Argentina, Brazil, and Colombia, commencing from the 22nd of September. The spokesperson stated:
"Our engagement encompassed experimental initiatives in various regions — namely Argentina, Brazil, Colombia, and Bahrain. This determination applies uniformly to all the Binance initiatives in question. There are no repercussions affecting any alternative cryptocurrency card undertakings."
Facilitating payments in native fiat currencies through the utilization of cryptocurrency assets held on the exchange, the Mastercard-Binance prepaid cryptocurrency card will undergo an orderly shutdown period, allowing cardholders the opportunity to convert their holdings within their Binance wallets.
Although Mastercard refrained from unveiling the underlying rationale for this decision, sources in the virtual sphere, including Bloomberg, intimated that this shift might stem from escalated oversight challenges faced by the embattled cryptocurrency exchange.
This collaboration's cessation arrives approximately twelve months subsequent to the initial partnership announcement in August, wherein Binance and Mastercard introduced a preloaded card tailored for the populace of Argentina. In the early stages of 2023, this joint initiative was further extended with the introduction of an additional prepaid cryptocurrency card within Latin America.
The narrative suggested in the report indicates that this partnership's termination transpired in direct response to the resurfacing regulatory impediments encountered by Binance on a global scale.
It is worth noting, as previously disclosed, that Binance and its Chief Executive Officer, Changpeng “CZ” Zhao, confronted legal action from the United States Securities and Exchange Commission on allegations of contravening local securities regulations. Simultaneously, the United States Commodity Futures Trading Commission levied a lawsuit against Binance, citing inadequate registration with the regulatory body overseeing derivatives.
According to unconfirmed reports, Binance was also the subject of an inquiry by the United States Department of Justice due to purportedly permitting Russian nationals to access the platform in violation of U.S. economic sanctions.
The recent account outlines that Mastercard isn't the exclusive entity stepping back from its association with Binance due to its global regulatory predicaments. Notably, Visa also discontinued the issuance of novel co-branded cards in partnership with Binance for the European market, with an apparent declaration from Binance in July.