Companies are withdrawing from Russia in droves, and three of the biggest payments companies, PayPal, Visa, and Mastercard, just joined the group. The three US-based financial giants announced that they’re discontinuing their services for Russia in solidarity with the international community.
International payments giant PayPal revealed its intentions to cease operations in Russia. According to the CEO and President, Dan Schulman, the company took this stance to condemn “Russia’s violent military aggression in Ukraine.” He added that PayPal would allow withdrawals for some time so that Russian-based customers can withdraw their funds.
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MasterCard followed suit by revealing that after reviewing the situation, it has decided to suspend its services in the country. The company claimed that regulatory requirements influenced the company’s decision to “block multiple financial institutions from the Mastercard payment network.”
Its counterpart, Visa, also made the same decision. It stated that it had initiated the process of stopping 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.
However, the Central Bank of Russia has stated that MasterCard and Visa cards will still work within the country. According to the bank, “Operations on them are processed within the country in the National Payment Card System, and sanctions do not affect them.” Thus, it’s likely that only cross-border transactions won’t be available.
With three of the world’s biggest payment services suspending their services in the country, the financial sanctions might affect the country even more. Already, the ruble has dropped in value considerably.
Would Russians take the crypto option?
This has led to suggestions that Russians might take to crypto for transactions. Before the conflict between Ukraine and Russia broke out, Russia was considering regulations that’ll legalize cryptocurrency and incorporate it into its traditional financial system.
These sanctions finally allow it to adopt digital currencies. Several authorities have warned that Russian oligarchs might want to use crypto to evade economic sanctions. But stakeholders in the crypto community believe it’s average Russian citizens that’ll adopt crypto in the face of economic uncertainty.
This is why many crypto exchanges, including Binance, Coinbase, and Kraken, have refused to withdraw their services for Russian users. That decision, however, has drawn criticisms from several people, including Hilary Clinton, who said she was disappointed in the exchanges’ responses.
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