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Global payments leader Mastercard is set to terminate its cryptocurrency card collaboration with the Binance exchange next month, the company informed Cointelegraph on Aug. 25.
Mastercard and Binance will discontinue all co-branded crypto card initiatives in Argentina, Brazil, and Colombia starting Sept. 22, a spokesperson for Mastercard stated, adding:
"We had four pilot programs in the market with them — Argentina, Brazil, Colombia, and Bahrain. This decision pertains to each of these Binance programs. There is no effect on any other crypto card initiative."
The Mastercard and Binance prepaid crypto card enables users to conduct transactions in local fiat currencies, funded by their cryptocurrency assets on the exchange. The wind-down phase will provide cardholders the opportunity to convert any assets in their Binance wallets.
While Mastercard did not disclose the rationale behind this decision, online sources such as Bloomberg suggested it could be linked to heightened regulatory scrutiny of the troubled crypto exchange.
The conclusion of the partnership occurs approximately one year after Binance and Mastercard initially teamed up last August to introduce a prepaid card for residents of Argentina. In early 2023, the companies broadened their collaboration with an additional prepaid crypto card in Latin America.
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The report indicates that the termination of the partnership is a response to renewed regulatory challenges facing Binance globally.
As previously noted, Binance and its CEO, Changpeng “CZ” Zhao, faced a lawsuit from the United States Securities and Exchange Commission for allegedly breaching local securities regulations. The U.S. Commodity Futures Trading Commission also initiated legal action against Binance for failing to register appropriately with the derivatives regulator.
Additionally, Binance has reportedly been under investigation by the U.S. Department of Justice for permitting Russian users to access the exchange in violation of U.S. sanctions.
Related: Binance labels restricted Russian banks on its platform as ‘Yellow’ and ‘Green’ cards
According to the recent report, Mastercard is not the only entity distancing itself from Binance amid its global regulatory challenges. Visa also ceased issuing new co-branded cards with Binance in Europe as of July, Binance reportedly stated.
Visa and Binance did not promptly respond to Cointelegraph’s request for comment.
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