Suspend Services Following the Ukraine War
Visa, Mastercard, and PayPal joined the massive number of companies leaving Russia following Putin’s “special military operation” against Ukraine. As such, the question remains if Russians will turn to cryptocurrencies.
Visa, Mastercard, and PayPal Leave Russia
Ever since the war started between the two former Soviet states, the Western world has taken a different approach than in the past and began imposing sanctions instead of getting directly involved in the conflict. Additionally, countless companies and organizations decided to withdraw from Russia, calling it the aggressor.
Many of the sanctions and those firms come from a financial standpoint, and the latest to join are three US-based giants – Visa, Mastercard, and PayPal.
Reuters reported PayPal’s intentions on March 5, indicating that the company had already closed its services early on Saturday in Russia. Dan Schulman, the firm’s President and CEO, explained that PayPal “stands with the international community in condemning Russia’s violent military aggression in Ukraine.”
The company will support withdrawals for a certain period, thus allowing Russian-based customers to withdraw their account balances.
Visa followed suit, saying that it had begun the process of ceasing all transactions over the coming days.
“Once complete, all transactions initiated with Visa cards issued in Russia will no longer work outside the country, and any Visa cards issued by financial institutions outside of Russia will no longer work within the Russian Federation.” – reads the statement.
Mastercard also said, “we have decided to suspend our network services in Russia,” after a thorough review of the current situation.
The firm explained that this decision was due to recent regulatory requirements from global watchdogs and the company’s actions to “block multiple financial institutions from the Mastercard payment network.”
Will Russian Go for Crypto?
While most national banks are being excluded from SWIFT and the aforementioned companies ceasing normal business operations, Russians will be left with very few options.
One of them seems to be employing the cryptocurrency industry. After the war broke, reports emerged claiming that digital asset trading volumes from Russia (and Ukraine) skyrocketed to new peaks.
Moreover, many cryptocurrency exchanges, including Binance, Kraken, and Coinbase, refused to halt servicing Russian-based users, at least for now. At the same time, many regulators warned that oligarchs could use digital assets to bypass the sanctions.
However, as Ripple CEO and Coinbase CEO pointed out, this seems highly unlikely. Instead, it’s more plausible for ordinary Russian citizens to turn to crypto as their national currency tumbles.