Due To US Restrictions, Visa and Mastercard Block Russian Banks

Two of the largest card operators, Visa and Mastercard, have claimed they have excluded Russian banks from their networks after the US sanctions went live. In the event of the invasion of Ukraine, these two cards operators announced the number of their donations to Ukraine. The donations reach roughly $2 million.

Relating to the decision of Visa and Mastercard, it comes after the United States imposed some of the toughest penalties against Russia. Due to these sanctions, the SWIFT payment system suspended Russian banks from using it. Moreover, Washington also froze the Russian central bank’s assets abroad. In addition, numerous assets of high-ranking Kremlin officials were frozen as well. 

In a statement, Visa noted that its actions aligned with the new restrictions. Meanwhile, Mastercard added that it will continue to cooperate with authorities to ensure that it complies with its standards. However, neither company said if the blacklist would have a financial effect.

Companies Block Their Operations In Russia

The war that Russia is continuing in Ukraine affects the country itself in many aspects. Several businesses have stopped cooperating with Russia after the implementation of new sanctions. In response to the Ukraine invasion, BP, the British oil giant, announced that it was selling its 20% interest in state-owned Russian rival Rosneft. As a result, such a move might cost the former up to $25 billion.

Following the cut-off of different companies in Russia, both Gazprom and Shell have noted that they are ending their joint ventures in Russia. According to Reuters, Nasdaq and Intercontinental Exchange have also temporarily banned trading in the shares of Russian-based corporations.

The Possible Increase of Crypto Utility in Russia

The banning of Russian banks by Visa and Mastercard, as well as rigorous penalties on most local lenders, may encourage the usage of cryptocurrency. Particularly, the rise of crypto use might appear among residents who may lose access to traditional financial networks.

In addition, international banks, like HSBC, have also announced they are blocking their operations in Russia. After the initial round of US sanctions, Russian crypto trade volumes soared. This has resulted while the Ruble fell against Bitcoin and other major altcoins.

As per the record, even before the current war situation, crypto usage was on experiencing an increase in Russia. According to some government statistics, Russians own around 12% of the world’s assets. Moreover, in light of recent mining prohibitions in China and Kazakhstan, the country has also been recognized as a possible crypto mining location.