MasterCard and VISA are reportedly banding cryptocurrencies and initial coin offerings (ICOs) in a “high-risk” category.
According to a report by Finance Magnates, sources with knowledge of the matter have confirmed that the card providers are going to take actions foreign exchange, binary, cryptocurrencies, and ICOs and will be classified as “High-Risk Securities Merchants”. The report states that MasterCard will be implementing the changes of classification from today. VISA, on the other hand, is holding off until December to make the shift.
As reported by the Finance Magnates, his means that the changes will have a consequence on both users and the industry. Specific to cryptocurrency users, this means that chargebacks could be executed up to 540 days after the transaction date. Those in the industry, however, have become the key target and some firms and exchanges have already told clients that they will not be able to accept credit card deposits anymore.
“Clients of brokers who are operating from loosely regulated jurisdictions and unregulated companies are facing a tough time. They either have to become entirely reliant on bank wires and alternative payment providers or await a solution to the problem on the part of their payment processors. Until such a solution becomes a reality, payment processors are set to suspend services to some brokers and cryptocurrency exchanges.”
Mastercard’s already firm distrust of the digital tender
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”.