There’s a bigger earthquake in Russia than SWIFT as the significant payment processors PayPal, Visa and Mastercard blocked Russia, citing the recent invasion of Ukraine. All the payment processors announced the move on Saturday.
The escalating economic sanctions following Russia’s invasion of Ukraine have placed Bitcoin and cryptocurrencies in general in the global spotlight once again. This follows announcements by PayPal, Visa, and MasterCard that they were suspending their operations in Russia, citing its ongoing invasion of Ukraine.
Visa said in a press statement it would begin the process of discontinuing transactions in Russia but said the process would take several days. On the other hand, MasterCard announced in a press release it was suspending its network services in Russia, which sent military forces into Ukraine at the end of February. Visa’s global communications vice president Andy Gerlt said:
“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.”
Unprovoked invasion of Ukraine and the unacceptable events that we have witnessed
Visa chairman and CEO Al Kelly similarly stated in the press release:
“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 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.”
Taking a similar route, MasterCard announced that besides blocking some Russian financial institutions, the payment processor ended support for any cards issued by Russian banks and blocked transactions from cards issued outside Russia but used “at Russian merchants or ATMs.”
PayPal supports the Ukrainian people and stands with the international community
Earlier on Saturday, Ukrainian vice-Prime Minister Mykhailo Fedorov announced via Twitter a letter sent by PayPal CEO Dan Schulman informing a similar shutdown. A PayPal spokesperson told Reuters the shutdown would still “ensure that account balances are dispersed in line with applicable laws.” PayPal chief executive Dan Schulman stated:
“PayPal supports the Ukrainian people and stands with the international community in condemning Russia’s violent military aggression in Ukraine.”
As major financial institutions disconnect Russia from the West through the primary payment links, it is expected that more retailers will turn to the cryptocurrency market due to its indiscriminate nature. A report by Chainalysis shows that trading between Russia’s ruble and cryptocurrencies experienced a sharp uptick. This indicates that more people are using crypto assets like Bitcoin, Ethereum, and USDT to make international payments.
Shockwaves are expected to be felt in the cryptocurrency market
As Russian peoples and companies look for alternatives and cryptocurrencies remain in sharp focus, the Central Bank of Russia maintains that Russians shouldn’t have anything to do with digital assets. As a result, more shockwaves are expected to be felt in the cryptocurrency market in the coming weeks or even the next few years. Tech lawyer Preston Byrne posted to Twitter:
“[The Visa and Mastercard shutdown] is a bigger earthquake than SWIFT […] trillions of dollars are going to be made building a mirror system that doesn’t respond to American pressure.”