The recent rift between payment moguls Visa and Mastercard with the embattled crypto exchange Binance marks an intriguing development in the ongoing saga of cryptocurrency regulations. Binance is currently the world’s largest crypto exchange by trading volume, and its present predicament gives us pause to question whether its market position will remain unscathed.
The exchange has not had an easy time lately. Multiple allegations have been levied against it by the U.S. Securities and Exchange Commission, including accusations that it’s operating an unregistered enterprise and has misled investors regarding the risks involved. Adding to the company’s plate of problems are charges by the U.S. Commodity Futures Trading Commission of a purported “willful evasion” of U.S. law, as well as a rumoured scrutiny by the U.S. Department of Justice for possible fraud.
Given this backdrop, it’s not unexpected that prominent corporations like Visa and Mastercard would seek to maintain a safe distance. Visa has reportedly ceased issuing new co-branded cards with Binance in Europe, while without divulging details, a Mastercard spokesperson verified that they too have severed ties with the exchange. The partnership cancellations apply across several Binance card programs across Argentina, Brazil, Colombia, and Bahrain.
However, despite the magnitude of this development, the repercussions for Binance in terms of its market share might be nominal. As Dave Weisberger, CEO and co-founder of CoinRoutes, points out, the impact on Binance’s liquidity positioning might be minimal. As long as its leading position there stands safe, the public will continue to trade on its platform.
Similarly, Leo Mizuhara, CEO of Hashnote, a CFTC-regulated digital asset management platform, points out that the sector on the whole might not feel the blow of this development significantly. Companies distancing themselves from Binance was largely an anticipated consequence of its squabbles with regulatory bodies.
Mizuhara adds that Mastercard’s disassociation from Binance seems justified given its recent engagement with the blockchain sector. In fact, both Mastercard and Visa have been consistently active in the blockchain industry, even in the face of a prolonged bear market causing several major insolvencies. The credit card behemoths aim to power ahead with their industry collaborations to introduce new payment programs to the markets.
Thus, the story of Binance’s regulatory clashes and the wider industry response signifies how increasing institutional caution could shape the future of the volatile cryptocurrency market.
Source: Coindesk
