Binance has announced the end of its crypto debit cards for customers in the Latin America and Middle East regions. The exchange did not reveal the exact reason behind the termination of the debit card or when or if users affected should expect another card.
On August 25 2023 experts from Bitai Method Official mentioned that the crypto debit card services in Latin America and the Middle East will be terminated by September 21 2023. However, the exchange mentioned that funds and disputes can still be processed until December 20 2023. The crypto debit card functioned like other debit cards, enabling users to pay for daily goods and services. The only difference between the cards is that crypto assets fund these cards.
Details on Binance Suspending Crypto Debit Cards
The issue first came out when an X (formerly known as Twitter) user enquired about issues with crypto debit cards in Colombia. The Binance help desk responded to the query with an announcement suggesting that debit card service termination will only affect a tiny portion of its customers – less than 1% of users in the select regions. The Exchange Customer Support Team said, “Users of this product will have until September 21, 2023, when the card will no longer be available. Binance accounts around the world are not affected.” The Team added, “Where available, users can also shop with crypto and send crypto using Binance Pay, a contactless, borderless and secure cryptocurrency payment technology designed by Binance.”
According to a Spokesperson for MasterCard, all co-branded crypto card programs by MasterCard and Binance in Argentina, Colombia and Brazil, starting September 22 2023, will end. The Spokesperson said, “We had four pilot programs in the market with them – Argentina, Brazil, Colombia and Bahrain.
This decision applies to each of these Binance programs. There is no impact on any other crypto card program.” The MasterCard and Binance crypto card allows users to make payments in local fiat currencies, funded by their crypto holdings on the exchange. Cardholders have until the given time to convert any assets in their Binance wallets.
Crypto Timeline for MasterCard
MasterCard did not divulge the reason for the termination. However, online reports from Bloomberg implied that it might be due to increased regulatory scrutiny of Binance. On August 30 2023, Binance announced its new Send Cash product for users in Colombia, Honduras, Guatemala, Argentina, Costa Rica, Paraguay, the Dominican Republic, Panama and Mexico. Users can transfer crypto funds directly to bank accounts via Binance Pay. In July 2023, Visa stopped issuing new co-branded cards with the European exchange. The end of the partnership comes about a year after Binance and MasterCard first partnered last August 4 2022, to launch a prepaid card for residents of Argentina. The card allowed users in Argentina to use Bitcoin (BTC) and other cryptocurrencies to make purchases and ATM withdrawals in fiat everywhere MasterCard was accepted. Argentine cardholders could earn up to 8% back on crypto from certain purchases.
Residents of Argentina were the first in the region to have access to the cards; however, in April, Binance announced a similar initiative in Ukraine for the European Economic Area in 2020. General Director of Binance in Latin America, Maximiliano Hinz, mentioned that the adoption has a lot of room to grow, and by using the Binance card, consumers get to receive fiat and pay in crypto of their choosing.
On November 8 2021, Lemon Card launched a card with Visa and offered 2% back in BTC for Argentine users. MasterCard also partnered with Buenbit and Belo to release prepaid and crypto rewards cards. In January 2023, Binance expanded its collaboration with another prepaid crypto card in Latin America. Dock issued the card, a payment institution regulated by Banco Central do Brasil, Brazil’s central bank. The card allowed new and existing users in Brazil with valid IDs to make purchases and pay bills with cryptocurrencies.
Binance’s Regulatory Hurdles
The report hints that the termination of the collaboration between Binance and MasterCard comes in response to renewed regulatory issues of Binance worldwide. The American Securities and Exchange Commission (SEC) recently sued Binance and its CEO, Changpeng Zhao (CZ), for allegedly violating local securities laws and operating as an unregistered national securities exchange, broker and clearing house.
The American Justice Department (DOJ), the United States Commodity Futures Trading Commission and regional regulators have also filed lawsuits against Binance. Recent coverage by the Wall Street Journal disclosed that Binance has been under investigation by the DOJ for possible violations of sanctions against Russia. Last week, Binance discontinued its buy-and-sell service, Binance Connect, barely a year after its launch. Binance claimed the move was essential to realigning its focus on primary products and long-term objectives. An article from Forbes disclosed that the service was halted because Checkout.com terminated their relationship due to regulatory compliance and money laundering concerns.
The new report indicates that MasterCard is not the only firm distancing itself from Binance amid its global regulatory issues. Meanwhile, Binance has requested court protection against the Securities and Exchange Commission (SEC) requests.