In this era of technology, when figments of tech are being crystallized into every fragment of human necessity, E-money or digital currency technology has shown that monetary value can be owned in digital form to engage in payments of goods and services.
This technology has attracted partnerships from several financial bodies, and until recently, FTX and Visa have reached crossroads in the global debit cards agreement.
FTX, abridged as Future Exchange, is the world’s second-largest cryptocurrency exchange that enables users to connect wallets, initiate trades, exchange digital or virtual currencies, enter into derivative contracts and transact NFTs (Non-Fungible Tokens).
Visa’s spokesperson said, “We have terminated our global agreements with FTX and their US debit card program is being wound down by their issuer.” However, in early October 2022, FTX and Visa announced an expanded partnership. Also, they revealed plans to introduce account-linked visa debit cards in 40 new countries.
What is the situation with FTX?
Presently, FTX’s value is plummeting with reactions from customers who started withdrawing funds in a rush. In the crisis, Binance Chief Executive Changpeng Zhao said its company was selling its FTX holdings worth about $500m.
The company has suffered a “giant withdrawal surge” of $6bn in three days with a daily withdrawal of tens of millions. Zhao indicated an interest in investing in FTX by agreeing to buy the company on Tuesday but declined the request on Wednesday.
In a quote, Zhao stated that “the issues are beyond our control to help.” According to Bankman–Fried, the company would need $4bn to stay solvent with a funding gap of $8bn. The interwoven relationship between FTX and other cryptocurrencies is already causing a fall in value in these digital currencies. Bitcoin has also recorded a drop in value this season.
Although the reason for Visa’s termination of the agreement with FTX was not disclosed, could the insolvency of FTX be the reason or vice versa?
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Photo by CardMapr.nl
