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Monday, February 26, 2024

Binance and Mastercard Part Ways Over Crypto Regulation Concerns

Global payment giant Mastercard (MA.N) will end its four crypto card programs with Binance in Argentina, Brazil, Colombia, and Bahrain as of Sept. 22, a spokesperson for Mastercard said via email on Thursday. The cards allowed users to make payments in traditional currencies, funded by their cryptocurrency holdings on the exchange. The company added that the decision will not impact Mastercard’s other crypto-card initiatives. Mastercard also has partnerships with other crypto exchanges, including Gemini, which outlines the ties on its website.

The move reflects the continuing challenges embattled crypto exchange Binance faces, as traditional financial institutions continue to pull back from working with the industry. Binance has been in the international crosshairs of regulators and has faced legal issues over alleged securities rules violations and commodities trading practices. The latest development will further test the resilience of the exchange and its founder, Changpeng Zhao.

According to a statement cited by Reuters, the decision by Mastercard will not impact any existing Binance cardholders. However, new customers will no longer be able to use the card in Argentina, Brazil, Colombia, and Bahrain, Mastercard confirmed.

The announcement follows a similar one made by Visa (VZ.N) last month, which ended a tie-up with the Binance crypto card in Europe. Mastercard’s head of crypto and blockchain, Raj Dhamodharan, told Reuters in April that the firm sought more partnerships with crypto firms but declined to comment on Binance specifically. He stressed that any card program “goes through full due diligence” and is continuously monitored.

In a separate statement, Binance said the decision to end its card services resulted from regulatory hurdles in some markets. The company is also facing pressure from some of its investors to scale back on its business growth. The news comes just a week after Binance’s CEO was arrested in the Philippines for allegedly embezzling funds from a Malaysian crypto investor.

PYMNTS notes that the decision by Mastercard and Binance to end their card partnership highlights the complexities of the interplay between the traditional financial sector and the dynamic world of cryptocurrencies. As the landscape continues to evolve and regulations take shape, such decisions by critical players like Mastercard and Binance will play a significant role in how the two interact moving forward.

This article was written by Varun Paul, a staff writer for PYMNTS who covers all things crypto. He has been in the space since the beginning and always wants to uncover the next big thing. Varun’s passion for writing about crypto led him to study journalism at the University of Pennsylvania. His finance and marketing background has helped him develop a well-rounded view of the industry’s workings from both perspectives.

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