VISA and MasterCard Deem Buying Bitcoin and Cryptocurrency as a “High Risk” Asset
Cryptocurrencies Are Now A “High Risk” Asset According To MasterCard And VISA
The financial services giants MasterCard and VISA are reportedly branding cryptocurrencies and initial coin offerings (ICOs) in a “high-risk” category.
Sources with close knowledge of the matter confirmed to Finance Magnates that card providers MasterCard and VISA are proceeding with their actions against forex, binary, cryptos and ICOs.
Back in April, MasterCard classified the crypto industry as high risk. The move effectively meant that chargebacks could be executed up to 540 days after the date of the transaction. Now Visa supported the same idea and announced that starting December 2018, all the payments to the above companies are considered high risk.
EU-regulated brokers are suffering due to significant changes to their operations stemming from the new regulatory framework. Meanwhile, offshore and unregulated companies are now facing a challenge from the new policies implemented by VISA and MasterCard. The operations of some companies are set to get affected materially. That said, the eternal cat and mouse game between regulators and businesses is set to continue.
The changes are expected to primarily impact brokers and companies from unregulated or loosely regulated jurisdictions. In addition, certain brokers and exchanges have already stopped accepting credit card deposits. Moreover, payment processors suspend their alliance with some clients until a viable solution is established.
In May this year, Broker Complaint Registry said that Mastercard informed its payment processors regarding these changes via an email. The trader community added: “According to the letter any high-risk business that operates without a license in their given jurisdiction will fall into a new category.
Notably, CEO of MasterCard Ajay Banga is known to dislike the concept of cryptocurrencies. Earlier this year, he condemned the industry, calling the crypto projects “junk”. He stated: “I think cryptocurrency is junk. The idea of an anonymized currency produced by people who have to mine it, the value of which can fluctuate wildly – that to me is not the way that any medium of exchange deserves to be considered as a medium of exchange”.
VISA also had ceased supporting crypto debit cards via a partnership with debit card provider WaveCrest in January of this year, with affected cards including products from CryptoPay, Bitwala, TenX, Wirex, and others.