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
Since the start of the war between the two former Soviet states, the western world has taken a different approach than in the past and has started to impose sanctions instead of getting directly involved in the conflict. Moreover, countless companies and organizations have decided to withdraw from Russia, calling it an 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, saying the company had already shut down its services early Saturday in Russia. Dan Schulman, the company’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, allowing customers based in Russia to withdraw their account balance.
Visa followed suit, saying that it had begun the process of ceasing all transactions over the coming days.
“Once completed, all transactions initiated with Visa cards issued in Russia will no longer work outside the country, and all Visa cards issued by financial institutions outside of Russia will no longer work within the Russian Federation. ” – read the statement.
Mastercard also said, “we have decided to suspend our network services in Russia,” after a thorough review of the current situation.
The company explained that the move was due to recent regulatory requirements from global watchdogs and the company’s actions to “block several 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 employ the cryptocurrency industry. After the outbreak of war, reports emerged claiming that trading volumes of digital assets from Russia (and Ukraine) had reached new heights.
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 the CEO of Ripple and the CEO of Coinbase have pointed out, this seems highly unlikely. Instead, it is more plausible for ordinary Russian citizens to turn to crypto as their national currency plummets.
