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Ukraine invasion credit networks Visa, Mastercard, and PayPal suspend Russian operations cryptocurrency exchanges platforms yet to make any moves

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Indrani bose Follow

INDIA

Mar, 09 2022

Mar, 09 2022

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On Saturday at late there were announcements made by the largest credit networks Visa, and Mastercard that they have decided to suspend their operations in Russia due to Russia’s unprovoked invasion of Ukraine. Ukraine's Deputy Prime Minister Mykhailo Federov tweeted that on the same day, he received a letter from PayPal CEO Dan Schulman supporting the country through an enhanced donation platform and confirming the company's decision to suspend PayPal services in Russia until further notice. Cryptocurrency exchanges such as Coinbase and Binance are going through intense pressure to block access from Russian customers, though the organizations are yet to make any moves.

Recently a sanction was made to limit or remove Russian banks from the SWIFT messaging system which led Russian banks to discontinue communicating with the rest of the world using the network. At the end of February, Russia had sent military forces into Ukraine.

Mastercard which has operated in Russia for more than 25 years, said it will not only block some Russian financial institutions but also end giving network support to cards that are being issued by Russian banks and block transactions from cards issued outside Russia but used at Russian merchants or ATMs.

Visa decides to coordinate with its clients and partners in Russia to block all Visa transactions taking place in the near future. The cyber and intelligence teams of the company will continue to work with governments and partners around the world to ensure stability.

This step taken by Visa and Mastercard will led all transactions initiated with cards issued within Russia to stop working outside of the country over coming days. Also, cards issued by financial institutions outside of Russia will not be usable any longer at any businesses or ATMs within the Russian Federation.

Paypal's Xoom service allows transferring funds domestically or internationally. Paypal took this step to limit the movement of Russian funds through Paypal's Xoom service.

In the press release, Visa Inc. Chairman and CEO Al Kelly said that the company "was compelled to act following Russia’s unprovoked invasion of Ukraine, and the unacceptable events that we have witnessed. We regret the impact this will have on our valued colleagues, and on the clients, partners, merchants, and cardholders we serve in Russia. This war and the ongoing threat to peace and stability demand we respond in line with our values.”

According to Mastercard taking this move will lead the company to focus on safety and wellbeing providing pay and benefits to around 200 colleagues located in Ukraine. The company is so critically important to so many stakeholders because of these 200 colleagues.

Reaction from cryptocurrencies exchange platforms

Bitcoin and other cryptocurrencies exchange platforms are also going to pressure to cease access from Russian customers. Although cryptocurrency exchanges could block access, its decentralized nature makes it nearly impossible for users to be alienated, ensuring its popularity. Ukrainian officials and lawmakers have urged crypto companies to block all residents of Russia unilaterally, although they have largely refused. According to CEO of crypto exchange Kraken, Jesse Powell the company would block all residents of Russia if legally forced to do. Coinbase, Binance, Huobi, KuCoin, Bybit, Gate.io, Whitebit, and Ukraine-based Kuna were being asked by Ukraine to cease all Russian accounts.

The reaction of Russia to this move:

Sberbank Rossii PAO which is Russia's largest state-owned lender confirmed their customers that still they can withdraw, transfer cash, and pay as normal in Russia's online and storefront businesses. As per the bank, Russian transactions utilize the National Payment Card System of the country instead of foreign payment systems. Russia's central bank through a statement confirmed that would continue to work within Russia after the credit card processors announced their suspensions.


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Indrani bose

CBW - External Analyst

INDIA

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