Mastercard, Visa step back from Binance card partnerships

Copy of 2023-06-15T173848Z_1214801585_RC2SJ1A69FEG_RTRMADP_3_USA-SEC-BINANCE-LAYOFFS.JPG-1692943057526 — Binance has come under heavy scrutiny from financial watchdogs across the globe, with pressure intensifying amid a crackdown on the industry after a series of blowups and scandals in the past year. Image Credit: REUTERS

Dubai: Mastercard and Visa stepped back from their card partnerships with Binance Holdings, distancing themselves from the cryptocurrency platform that’s under threat from regulators worldwide.

Visa stopped issuing new co-branded cards with Binance in Europe as of July, a spokesperson for Binance said. Mastercard, meanwhile, will end its card partnership with Binance entirely in September. Mastercard declined to give a reason for the move. Visa didn’t respond to requests for comment.

Binance has come under heavy scrutiny from financial watchdogs across the globe, with pressure intensifying amid a crackdown on the industry after a series of blowups and scandals in the past year. The company and its CEO Changpeng “CZ” Zhao were sued by the US Securities and Exchange Commission for breaking securities rules and by the Commodity Futures Trading Commission for shirking rules to allow American users access to the exchange. The company has disputed the allegations.

Copy of 2023-06-05T085442Z_183296642_RC2PDX90XT9C_RTRMADP_3_CRYPTO-BINANCE-MONEY-1692943060001 — Visa and Mastercard’s moves are the latest blow to Binance’s effort to push into the mainstream market, and come as it has found itself increasingly isolated from the traditional financial system.

Cut off

Binance got cut off from the US banking system in February, and lost the ability to accept some bank transfers in Australia in May. Most recently, Binance decided to shut down a one-year old product called Binance Connect that allowed businesses to accept crypto through Visa and Mastercard. Its banking partner in Europe is set to stop providing support in September.

Binance Card, launched as part of a push to encourage crypto adoption more broadly, allows the crypto exchange’s consumers to pay for basic daily expenses with their funds in crypto assets. The Binance Visa Card program was unveiled in September 2020.

Mastercard’s decision will affect all four of its co-branded card programs with Binance in Argentina, Brazil, Colombia and Bahrain, starting September 22, the credit-card giant said in an emailed statement. Binance said in a post on social platform X, formerly known as Twitter, that less than 1 per cent of users in Latin America and the Middle East will be impacted by the decision and that Binance accounts globally are not affected.

Mastercard said there’s no impact on any other crypto card program. The wind-down period will allow cardholders to convert any holdings in their Binance wallets, it said.