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The issuer of the Mastercard card feels the hang of the decision of the major US banks to ban cryptocurrency card transactions.
Growth in cross-border volumes is trending downwards, as evidenced by the 19% increase recorded last month compared to 21% for the entire first quarter, according to the company's results.
The 2 percentage point decrease in Mastercard on cross-border volume is a reflection of a "recent decline in crypto wallet funding," according to Martina Hund-Mejean, CFO of Mastercard, on the call income of the company.
Mastercard can thank JPMorgan, Bank of America and others for this decline because the decision of these banks to prohibit customers from using their credit card to process cryptocurrency has had a domino effect on other banks like Capital One and Citigroup.
Even though Mastercard had an otherwise excellent performance in the first quarter, call analysts were drawn to the cryptocurrency results "like a moth", as the explained James Eric Friedman, analyst at Susquehanna. Friedman said of the "deterioration": "It's a bigger appeal than we had expected on crypto", asking if the company was expecting it to ever come back .
Mastercard's Hund-Mejean has identified the United States as the epicenter of the fall in cryptocurrency wallet financing.
"The problem is that a number of banks have decided, particularly in the United States, that they would not allow the use This is why we have already seen a relatively large decrease in volume related to this event, "Hund-Mejean said.
Mastercard CEO Ajay Banga talked about his recent trips to Asia and talked about the spinoffs of the $ 530 million NEM hack from Coincheck, based in Tokyo. Instead of blaming the banks that issued the credit card bans, Banga has reported a decreasing demand for cryptocurrency transactions today compared to Q4 2017 and Q1 2018. Keep in mind the mind that Banga has already written decentralized digital currencies as "undesirable". Similarly, Visa's chief financial officer has launched a tirade against bitcoin.
Stranger Things Happened
The decline in cross – border volumes of Mastercard is not a phenomenon of a month or a quarter. While Mastercard is working differently on all fronts, as evidenced by higher than expected earnings, cross-border volumes will face "tougher comparisons" for the remainder of 2018 because of the strong euro's strength. last year.
Is it possible that we can see the banks reverse their course on their previous call to ban credit card transactions for cryptocurrencies? Perhaps. Stranger things happened in a week when Goldman Sachs officially launched its bitcoin trading desk and South Korea is pushing to legalize initial coin offerings instead of banning them.
Image from Shutterstock.
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