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


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.

Indrani bose
CBW - External Analyst
INDIA