Breaking: Visa, Mastercard Block Russian Banks As Per New U.S. Sanctions

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Visa and Mastercard, the world’s largest card operators, said they had blocked Russian banks from their networks under new U.S. sanction orders. The two also announced $2 million donations each in humanitarian aid to Ukraine.

Their move comes in the wake of some of the strictest U.S. sanctions against Russia yet, which saw several Russian banks blocked from the SWIFT transaction system. Washington also froze the Russian central bank’s overseas holdings, as well as those of several high-ranking Kremlin officials.

Visa said it was taking swift actions to comply with the new restrictions, while Mastercard said it would continue to work with regulators to fully abide by their requirements. Neither firm specified whether there would be a financial impact from the blacklist.

Exodus from Russia

New sanctions against Russia, over its invasion of Ukraine, has seen several companies cut ties with the country. Recently, British oil giant BP said it was exiting its 20% stake in state-owned Russian peer Rosneft, which could see the former take up to a $25 billion hit.

Shell also said it would exit its Russian operations, which it jointly operates with gas group Gazprom. Exchange operators Nasdaq and Intercontinental Exchange also temporarily halted the trading in the shares of Russia-based companies, Reuters reports.

More potential for crypto?

Visa and Mastercard’s blocking of Russian banks, along with strict sanctions against most local lenders could invite more adoption of crypto, especially by citizens who stand to lose access to conventional finance networks.

International banks, including HSBC, have also said they will curb operations in the country.

Russian crypto trading volumes were already seen surging after the first wave of U.S. sanctions, while the ruble slumped against bitcoin and most major altcoins.

Crypto adoption in Russia was on the rise even before the conflict. A government report had estimated that Russians represent about 12% of the world’s holdings. The country has also been identified as a potential destination for crypto mining, particularly after bans in majors China and Kazakhstan.

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Time Stamp: March 1, 2022