The European holders of cryptocurrency cards woke up this week to discover that their plastic now has no value. An offensive directed by Visa has seen several cryptographic card issuers forced to terminate their services throughout Europe. The Visa subsidiary, Wavecrest, is blamed for the withdrawal of service, which affects the scores of cryptographic card issuers, including Bitwala, Tenx, Bitpay and Xapo.
Apparently overnight, Visa, acting through Wavecrest, put an end to cryptocurrency cards. Prepaid cards, which have become extremely popular in the crypto community, provide a means to indirectly pay for goods and services using cryptocurrencies. Cards are a means of closing the gap between cryptographic and fiat worlds, which prevents cryptocurrency holders from needing to convert cash to spend their digital assets.
As a result of the offensive, companies like Cryptopay, Bitwala and Bitpay have had no choice but to put an end to their European services and return funds to users. Before the news that the corrective measures arose, the price of the PAY token linked to the Tenx card was reduced by 15%. With the Tenx wallet in Bittrex still out of line, apparently as a result of the Specter bug being patched, many token holders have not been able to transfer PAY from their mobile wallets to their normal exchange platforms. The Tenx PAY token was quoted at USD $ 5 hours ago, but later it was around USD $ 4.30. Today Sunday, at 8:00 a.m. in New York, it is priced at USD $ 4.01.
Bitwala was one of the first card issuers to tell the story to their customers, announcing in their Twitter account:
Following an announcement from our card issuer on behalf of Visa Europe, Bitwala cards are removed from the transaction as of today. Our team is holding an emergency meeting to resolve the problem taking into account the interest of cardholders and will make an update soon. "
Cryptopay tweeted:
Unfortunately, the issuer of our card instructed us to suspend all Cryptopay prepaid cards as of January 5, 2018. All funds stored on the cards will be secure and will be returned to your Cryptopay accounts as soon as possible. Sorry for all the inconveniences caused, we are working on the solution. "
Other cryptographic card companies have not yet commented, but it seems that the vast majority of European cryptocurrency cards depend on Gibraltar-based Wavepay, including Uquid, Coinsbank, Spectrocoin, Advcash and Wirex.
In an email sent to his clients today, Xapo explained: "Unfortunately, Xapo did not receive any advance notice to prepare for the cancellation of our card program," and continued:
Your Xapo card has been deactivated, and you will not be able to use it for additional payments or withdrawals. The rest of your Xapo account remains active, and you can continue to access your Xapo portfolio balance and uninterrupted funds. All other Xapo services are available for use, as always. "
The email ended: "As a token of our appreciation for being a loyal Xapo customer, once we can serve the Xapo cards in your country again, we will offer you a new card at no charge. We are working hard to find alternative card solutions for you. Recent years have shown how powerful a payment card with cryptocurrency can be, and we are already in talks with potential card issuers, which allows Xapo to continue serving customers in Europe and beyond. "
The reasons why Visa chose this measure are not clear, although the company has been considered hostile to Bitcoin for a long time. Visa has declared that the cards have been suspended due to "continuous breach of our operation rules" and insists that the move is not part of a campaign directed against cryptocurrency. It also states that Visa cards that convert Bitcoin into a fiat currency will not be affected by the decision, indicating:
Visa has other approved card programs that use trust funds that have been converted into cryptocurrencies in several jurisdictions. The termination of the WaveCrest Visa membership does not affect these other products. "
Many users of the web have long distrusted Visa. After all, this is the company that facilitated the financial blockade of Wikileaks in 2011. That decision finally turned out to be the salvation of Wikileaks, and Julian Assange later said that the change to bitcoin caused an unexpected gain when the cryptocurrency began to multiply in the price.
The repercussions of the Wavepay edict are still felt, and it is too early to say whether the affected cryptocurrency companies will be able to find an alternative payment processor. Whatever the reason for the ban, the case illustrates something that bitcoiners have known for years: too much centralization is a dangerous thing.