Visa (V:NYE) and Mastercard (MA:NYE) Delays Crypto Adoption

Crypto Halt

Visa and Mastercard have put the brakes on their plans to partner with cryptocurrency firms after high-profile collapses rocked investor confidence in the industry. According to anonymous sources, both payment giants have decided to delay launching certain products and services related to cryptocurrency until market conditions and regulatory environments improve. The bankruptcies of industry majors FTX and BlockFi in 2022 rattled investors and led to increased regulatory scrutiny on the sector. The move is a reminder that there is still a long way to go before cryptocurrency becomes a part of mainstream payments and financial services, according to a Visa spokesperson.

In recent years, major card firms had warmed up to cryptocurrency as the popularity of the asset class exploded. Mastercard teamed up with crypto lender Nexo in April 2022 to launch what it called the world’s first “crypto-backed” payment card. In November 2022, Visa severed its global credit card agreements with FTX, just a month after announcing an expanded partnership with the exchange. American Express had also said it would consider using cryptocurrency as a possible option to redeem reward points in the future. However, it is not viewing crypto tokens as a strategic priority in the near-term, according to a source familiar with the matter.

The delays by Visa and Mastercard, among other companies, are attributable to an uncertain regulatory environment for cryptocurrency, said Thomas Hayes, chairman and managing member at investment firm Great Hill Capital. Delays are not related to their core business, which remains strong, but to declining demand/interest for cryptocurrency services in the near term. The move by Visa and Mastercard comes amid growing concerns among regulators globally about the use of cryptocurrency for illicit activities, including money laundering and tax evasion. Regulators have also raised concerns about the volatility of the cryptocurrency market and its impact on financial stability. While cryptocurrency has the potential to revolutionize the payments and financial services industry, regulatory clarity is needed to ensure its safe and secure integration into mainstream finance.

Analysts Consensus Data

Mastercard Inc.

Mastercard stock forecasts from 31 analysts, has the average analyst target price for Mastercard Inc at 411.05. Mastercard’s consensus analyst rating is a “Strong Buy”.

Visa Inc.

Visa’s stock forecasts from 29 different analysts, has the average analyst target price for at $252.17 over the next 12 month period. Visa’s consensus  analyst rating is a “Strong Buy”.

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