US payment giants Visa and Mastercard are reportedly holding off on plans to forge new partnerships with crypto firms as more headwinds hit the crypto space, according to a Reuters report citing people familiar with the matter.

Both Visa and Mastercard have decided to push back the launch of certain products and services related to crypto due to the uncertain regulatory environment for crypto and declining demand/interest for crypto services until the market condition improves, the report said.

Over the past couple of years, major card firms had warmed up to crypto as the popularity of the asset class exploded, with some touting it as the next big thing in finance.

Mastercard collaborated with crypto lender Nexo in April 2022, to launch what it called the world's first "crypto-backed" payment card. Visa had also partnered with the now defunct FTX on global credit card offering, but has since severed its ties with FTX, just a month after announcing an expanded partnership with the exchange. Both also partnered with cryptocurrency exchange Binance to issue crypto-fiat-linked payment cards.

The string of high-profile collapses last year including FTX, Three Arrows Capital and others have however soured sentiments in the industry, resulting in the drawback from investing companies and potential partnerships. Sentiments are not expected to pick up until market conditions and the regulatory environment improve.