Visa and Mastercard, per sources, are pausing partnerships with cryptocurrency firms after FTX and BlockFI debacles lead to high regulatory scrutiny. Visa and Mastercard are cautious that the cryptocurrency industry’s streak of losing billions of dollars in 2022 bankruptcies invited regulatory scrutiny on the sector.

Visa and Mastercard have reportedly moved forward with rethinking the launch of some cryptocurrency products and services in the current market environment. The two U.S.-based financial payment companies reportedly want the cryptocurrency market conditions to settle down with a better regulatory environment.

A Visa spokesperson reportedly said, Recent high-profile failures in the crypto sector are an important reminder that we have a long way to go before crypto becomes a part of mainstream payments and financial services. But Visa’s crypto strategy reportedly still stays the same.

Mastercard spokesperson reportedly said, Our efforts continue to focus on the underlying blockchain technology and how that can be applied to help address current pain points and build more efficient systems.

Various card companies have been bracing to explore the crypto landscape as a popular asset class for years (even terming it the next frontier in finance). A couple of card companies had also announced various partnerships with crypto entities, with dedicated teams set to study the blockchain technology.

Mastercard had earlier partnered with Nexo (a crypto lender) in April to reportedly launch a “crypto-backed” payment card. Visa canceled its global credit card agreements with FTX in November.

Thomas Hayes, chairman and managing member, Great Hill Capital, said, They cannot and should not move ahead until there is a clear regulatory framework.

In 2021, the American Express (AMEX) expressed its willingness to accept crypto as an alternative to redeem reward points. But reportedly AMEX is not taking crypto tokens on a strategic priority basis any time soon, per sources.

An emailed statement from an AMEX spokesperson reportedly states, In the near-term, we don’t see crypto replacing our core payment and lending services.