Mastercard Ends Crypto Card Program With Binance

Mastercard, one of the largest payment giants globally, has ended its cryptocurrency card partnership deal with the Binance cryptocurrency exchange. The partnership deal will end next month.

Mastercard and Binance to End Crypto Card Partnership

Mastercard and Binance will end all the co-branded crypto card programs in Argentina, Brazil, and Colombia from September 22. A spokesperson from Mastercard also said that the end of the partnership applies to all Binance crypto card programs.

Mastercard and Binance have worked on four pilot programs in Argentina, Bahrain, Brazil, and Colombia. Mastercard hosts a prepaid crypto card that lets users settle payments in local fiat currencies. Users with crypto holdings fund these payments with money in their accounts on the exchange.

Users of these crypto cards have been given a wind-down period where the cardholders can convert their holdings in their Binance wallets. Mastercard has not given any reason behind winding down the card offering, but a Bloomberg report had suggested the decision might be because of the increased regulatory scrutiny on Binance.

Binance and Mastercard secured their first partnership in August last year. At the time, the two launched a prepaid crypto card available in Argentina. The partnership appeared to work for a while earlier this year. They extended the partnership deal to launch a new prepaid crypto card in Latin America.

The head of crypto and blockchain at Mastercard, Raj Dhamodharan, had said that the company sought more partnerships with crypto companies. As such, ending a deal with the largest cryptocurrency exchange globally raises questions.

At the time, Dhamodharan had said that Mastercard had partnered with other cryptocurrency exchanges, Nexo and Gemini, for the crypto cards program. Binance cards enable users to settle payments in traditional currencies, boosting the purchase process for crypto users.

Binance faces regulatory scrutiny

Binance and the CEO, Changpeng Zhao, face a lawsuit from the United States Securities and Exchange Commission (SEC). The commission has accused them of violating the existing securities laws by offering unregistered securities and providing services for which it was not registered.

Besides the SEC, the US Commodity Futures Trading Commission (CFTC) has also filed a lawsuit against the Binance exchange. The CFTC accused Binance of failing to secure the appropriate registration with the derivatives regulator.

Earlier reports had also said that Binance was being investigated by the US Department of Justice. The exchange was sued for allowing Russians to use the exchange in violation of US-imposed sanctions.

The regulatory woes facing Binance have affected how its partners interact with the exchange. Mastercard is not the only firm that is cutting ties with Binance. According to some reports, Visa stopped issuing crypto cards under its Binance partnership in July.

Despite the recent bearish sentiment, Visa and Mastercard have played a critical role in the blockchain industry. Crypto cards have become increasingly popular because of offering convenience to users.