Mastercard and Visa have lost some business with the beleaguered cryptocurrency exchange Binance. Traditional financial institutions are becoming increasingly hesitant to work with the company due to intense regulatory scrutiny and broader concerns regarding financial compliance in the cryptocurrency industry.
Binance announced Thursday via X, the company formerly known as Twitter, that Mastercard will shortly discontinue offering Binance-branded cards in Latin America and the Middle East. These cards allow customers to use their crypto to purchase goods. According to a tweet from Binance Customer Support, users have used the product, like the majority of debit cards, to pay for essential daily expenses.
“Only a minuscule fraction of our users (less than 1% of users in the mentioned markets) are affected by this. Users of this product will have until September 21, 2023, to use the card before it is no longer valid.
“International Binance accounts are unaffected. Binance Pay is a contactless, borderless, and secure cryptocurrency payment system,” the company added. A Mastercard spokesperson told CNBC that, as of September 22, four pilot Binance co-branded Mastercard card initiatives in Argentina, Brazil, Colombia, and Bahrain “will no longer be in use.”
“This provides cardholders with a wind-down period to convert any holdings in their Binance wallet,” a Mastercard representative explained. “There is no impact on any other crypto card program.”
Visa has also taken steps to distance itself from Binance. As of July, the company ceased issuing new co-branded cards with Binance in Europe, according to a spokesperson for the company who spoke with Bloomberg.CNBC attempted to reach Binance and Visa, but neither party responded immediately.It demonstrates that the financial services industry continues to respond lukewarmly to cryptocurrencies.