Mastercard is ending its partnership with the cryptocurrency exchange Binance for its crypto card programs in several South American countries, including Argentina, Brazil, and Colombia. This decision is set to take effect on September 22. The reason for this move was not clearly stated, but it’s suggested that it might be related to increased regulatory scrutiny faced by Binance, according to the Bloomberg report on August 24, 2023.
The Mastercard-Binance partnership initially enabled users to utilize their crypto assets on the Binance platform for making payments in local currencies. This collaboration was inaugurated around a year ago with the introduction of a prepaid card tailored for Argentina. Subsequently, it expanded to encompass other countries within the Latin American region.
The decision to sever ties appears to be a direct response to Binance’s ongoing and escalating regulatory challenges on a global scale. The exchange, along with its CEO Changpeng “CZ” Zhao, is arguing with legal actions brought forth by the U.S. Securities and Exchange Commission (SEC) related to alleged breaches of securities laws.
Furthermore, the U.S. Commodity Futures Trading Commission (CFTC) also filed a lawsuit against Binance for its purported failure to properly register with the regulatory body supervising derivatives. Compounding these woes is a probe by the U.S. Department of Justice into Binance’s purported breach of U.S. sanctions, particularly its alleged facilitation of Russian users evading these sanctions.
Mastercard’s distancing from Binance due to these regulatory concerns is part of a broader trend, with Visa already having stopped issuing co-branded cards with Binance across Europe since July. The conclusion of this collaboration will provide cardholders with a transition period to convert their holdings stored in Binance wallets.
In a recent report by Todayq News on August 16, 2023, Kapital Bank and Ravnaq Bank of Uzbekistan have received approval from NAPP (National Agency of Project Promotion) to introduce the UzNEX crypto card in collaboration with Mastercard. This card aims to seamlessly integrate traditional banking and crypto exchange, offering users a convenient way to manage finances and explore cryptocurrencies with global accessibility.
Back in August 2021, Mastercard and CoinJar enabled Australians to spend cryptocurrencies like cash both online and in physical stores using the CoinJar Card. This card supports 30 cryptocurrencies, has no ongoing fees, and offers a 1% conversion rate. It functions digitally, and physically, and is compatible with Apple Pay and Google Pay. Importantly, these other crypto-card initiatives offered by Mastercard remain unaffected by the Mastercard-Binance decision.