- Visa and Mastercard are reducing ties with Binance due to its ongoing legal battles.
- Binance’s dominance in crypto trading is unlikely to be significantly impacted.
- Experts suggest that the separation might not greatly affect the broader crypto industry.
Visa and Mastercard’s decision to scale down their connections with Binance isn’t unexpected given the exchange’s ongoing legal struggles. However, this move is unlikely to significantly impact Binance’s market share in the cryptocurrency exchange arena.
Binance, the largest crypto exchange in terms of trading volume, is currently facing multiple allegations from the U.S. Securities and Exchange Commission (SEC). These accusations include claims of operating without proper registration and misleading investors about risks. Additionally, the U.S. Commodity Futures Trading Commission (CFTC) lodged charges against Binance in May, citing deliberate evasion of U.S. regulations. The U.S. Department of Justice is also reportedly investigating the exchange for potential fraud.
Considering the mounting legal challenges Binance is grappling with, the decision by mainstream financial firms like Visa and Mastercard to distance themselves from the exchange is unsurprising. Dave Weisberger, the CEO and co-founder of CoinRoutes, noted, “It’s unsurprising that payment processors want to distance themselves from that.”
Visa is said to have halted the issuance of new co-branded cards with Binance in Europe, while Mastercard confirmed the termination of its partnerships with Binance, specifically related to pilot programs in Argentina, Brazil, Colombia, and Bahrain. Binance itself announced on its social media platform (formerly Twitter) that the Binance Card would no longer be accessible in Latin America and the Middle East. Nevertheless, experts believe that these shifts are unlikely to substantially dent Binance’s market presence, given its robust global reach.
Leo Mizuhara, CEO of Hashnote, a CFTC-regulated institutional digital asset management platform, shared that this separation might not significantly impact the broader cryptocurrency industry. Mizuhara stated, “This development is probably not that big of a deal in terms of the impact on the industry, as people and organizations pulling away from Binance was already pretty much expected given its issues with the CFTC and DOJ.”
Mizuhara also reasoned that Mastercard’s distancing from Binance aligns with the company’s increasing involvement in the blockchain sector. He pointed out, “Mastercard has shown an increasing appetite to engage with the blockchain industry, and this move away from Binance is more about institutions being cautious about potential bad actors.”
Both Visa and Mastercard have demonstrated their interest in the blockchain space, even during challenging market conditions. Both companies have expressed their commitment to collaborating with industry partners to introduce payment initiatives to the market.