Cryptocurrency exchanges and financial services companies will likely no longer be able to accept transactions made with many major credit cards after the companies cease operations for Russian-based users.
On Saturday, Visa, Mastercard and PayPal said they would suspend operations in Russia following the country’s military actions in Ukraine. Visa called Russia shares an ‘unprovoked invasion’ while Mastercard noted his decision was aimed at supporting the Ukrainian people. The next day, American Express made a similar announcement, saying this would halt operations in Russia and neighboring Belarus.
Apple Pay and Google Pay are said to have restricted services for some Russians, although users are also unlikely to be able to use the aforementioned credit cards for payment app transactions.
We are grateful to @Dan_Schulman for #StandingwithUkraine and for suspending business in russia. It makes a huge difference. @PayPal we welcome you to Ukraine! Your presence will provide more financial freedom to 40 million Ukrainians in these difficult times.
— Mykhailo Fedorov (@FedorovMykhailo) March 8, 2022
The decision by three major US credit card companies and others to cease operations in Russia appears to have been independent of efforts to comply with economic sanctions, which applied to some Russian banks and wealthy individuals. Coinbase announcement on Sunday that he had blocked more than 25,000 wallet addresses “linked to Russian individuals or entities that we believe are engaging in illicit activities”, but at the time of publication he has not publicly addressed the ban on credit card.
Following the change in company policy, average Russians using Visa or American Express credit cards abroad or within the country apparently would no longer be able to use them for day-to-day transactions. Mastercard cards issued by Russian banks will no longer be supported by the company’s network, while those issued by other foreign banks “will not work at Russian merchants or ATMs.”
“We don’t take this decision lightly,” said Mastercard, which has operated in Russia for more than 25 years.
However, the central bank of Russia Posted a statement on Sunday that Mastercard and Visa cards would “continue to operate in Russia as usual until their expiration date,” with users able to use ATMs and make payments. It’s unclear how the Central Bank of Russia came to this conclusion given statements by credit card companies, but it did acknowledge that cross-border payments and in-person card use abroad would not be possible. .
Although the companies did not provide a specific timeline as to when operations would completely cease, at least one cryptocurrency exchange has warned users of the change, which is likely to affect many Russian users. Tuesday, Binance announcement from Wednesday, the exchange will no longer be able to accept payments from Mastercard and Visa cards issued in Russia – the company does not accept American Express.
This is out of our hands. Not our decision. https://t.co/K3mH75Ul3B
— CZ Binance (@cz_binance) March 8, 2022
Presumably, not all consumers wishing to buy crypto through an exchange with a credit card issued in Russia by one of these companies will be able to do so soon, although peer-to-peer transactions are apparently still available. The decision drew mixed reactions from social media, with many saying credit card companies could help Ukraine by hurting Russia economically, but at the expense of civilians who had no say in the matter. the military actions of their country.
“Preventing Russian citizens trying to flee Russia from accessing their money is a crime,” noted Marty Bent, co-founder of crypto mining company Great American Mining. “Visa and MasterCard [are digging] their own graves by politicizing their products and pushing people around the world towards Bitcoin.
“For someone staying in Russia, the cards still work, but you can’t leave because you won’t be able to pay anything,” noted Twitter user Inna, who claimed to live in Moscow. “Putin approves.”
As I warned about two weeks ago. #crypto is just the way. #Visa Anna #MasterCard just showed the world how unstable, independent, centralized and political they are by abandoning the Russian people who are as far away from war and Russia as possible. It is modern fascism. https://t.co/wnHEtoKO0J
— Anti Danilevski (@AntiDanilevski) March 6, 2022
Related: Crypto Offers Russia No Way Out of Western Sanctions
While the abolition of Visa and Mastercard is a seemingly major blow to Russia and its residents, reports to suggest the country could turn to Chinese payment systems like UnionPay – accepted by peer-to-peer cryptocurrency exchange Paxful. Russia’s central bank also has its own Mir cards for payments in the country and in nine countries, including Belarus and Vietnam.
Regulators have not issued guidelines on crypto exchanges aimed at preventing Russian users from trading their coins. The United States and the European Union have hinted that they would consider Russia potentially using digital currency transactions to evade sanctions. Leaders of many exchanges, including Kraken, have Posted statements saying they will abide by government guidelines, but not unilaterally block all Russian users.