As the cryptocurrency space remains in a volatile state following a series of high-profile implosions, the resulting heightened regulatory scrutiny, and heavy political involvement, major partners are taking a step back in their plans.
Reuters reported last week that the United States’ biggest payment companies Visa (NYSE: V) and MasterCard (NYSE: MA) have announced that they will be pressing pause on the launch of products and services related to crypto “until market conditions and the regulatory environment improve,” citing sources who asked not to be identified.
A representative for Visa said that “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.”
While a spokesperson for Mastercard indicated that the halt is temporary, “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.”
The u-turn away from crypto of major partners underscores the broader industry’s need to focus on improvements in governance, compliance, and managing risks, without losing sight of its developments and breakthroughs.
Silvergate Shakeup
After slightly recovering from the massive shakeup from the messy collapse of the crypto exchange FTX, the space is seeing more volatility from the Silvergate Capital (NYSE: SI) crash.
On Friday, just two days after announcing a delay in the submission of its annual report, the bank announced on its website that it has shut down the Silvergate Exchange Network (SEN), the service that the bank billed as its 24/7 banking service, which enabled digital currency and institutional clients to send US dollars at any time of day.
Before the service fell apart in recent days, crypto platforms such as Coinbase, Bitstamp, Paxos, Gemini, and others had signed on to the service to provide further legitimacy to the crypto market.
Bitcoin fell to around $22,000 following the incident.
Information for this briefing was found via Reuters, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
