Visa, Mastercard and PayPal, and a large number of companies have left Russia after Putin’s “special military operation” against Ukraine.
Many of those sanctions and companies stem from the main points, and the latest to join are three US-based giants – Visa, Mastercard and PayPal.
International payments giant PayPal has revealed its intention to cease operations in Russia. According to CEO and President, Dan Schulman, the company took this stance to condemn “this country’s brutal act of military aggression in Ukraine”. He added that PayPal will allow withdrawals for a while so customers in the country can withdraw their funds.
Visa has also made a similar move, saying it has begun the process of closing all transactions:
“This means that all Visa cards issued in Russia will no longer work outside the country, and cards issued outside Russia won’t work in the country.”
MasterCard went on to reveal that after reviewing the situation, they have decided to suspend services in the country. The company claims that the regulatory requirements influenced the decision to “block multiple financial institutions from the Mastercard payment network”.
However, the Central Bank of Russia has stated that MasterCard and Visa cards will still work in the country. According to the bank, “Operations on them are processed domestically within the National Payment Card System and the sanctions do not affect them.” Therefore, it is more likely that only cross-border transactions will not be available.
While most of Putin’s national banks are being phased out of SWIFT and the aforementioned companies are closing their businesses, as usual, the people of this Eastern European country will be left with very few options.
This has led to suggestions that Russians could use cryptocurrencies for transactions. Before the special military campaign, they were looking at regulations that would legalize cryptocurrency and introduce it into their traditional financial system.
One of them seems to be using the crypto industry. After the outbreak of war, it was reported that digital asset trading volumes from Russia (and Ukraine) skyrocketed to new highs.
This is why many crypto exchanges, including Binance, Coinbase, and Kraken, have refused to withdraw their services to Russian users. However, that decision was met with criticism from some, including Hilary Clinton, who said she was disappointed by the exchanges’ response.
David Carlisle, policy and legal director at blockchain analytics firm Elliptic, thinks that Russia could increase the mining of cryptocurrencies to avoid sanctions.