Visa, Mastercard and PayPal are suspending operations in Russia due to the ongoing conflict in Ukraine, the companies announced this weekend. Everyday Russians will now suffer the actions of their leaders as US Dollar fungibility comes under pressure.
Visa will work to discontinue transactions in Russia, which will take a few days according to a press statement. Mastercard said it would suspend all its network services in Russia, which started a military operation in Ukraine at the end of February.
“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,” said Visa’s Communications VP Andy Gerlt.
Mastercard took the same route, saying that it will end support for any cards issued by Russian banks and blocking transactions from cards outside Russia but used “at Russian merchants or ATMs”.
Notably, this sets a precedent to potentially target bitcoin and cryptocurrency addresses which have similar transaction history. This is a major departure from physical cash which is considered interchangeable (fungible), regardless of its transaction history. Fungibility means one dollar equals one dollar regardless of whether it was used in drug smuggling, wars, weapons purchasing and other nefarious activities. Fungibility is a property of good money. Litecoin’s privacy update MimbleWimble makes this an absolute reality regardless of geopolitics.
Earlier on Saturday, Ukrainian Vice Prime Minister Mykhailo Fedorov tweeted a letter from PayPal announcing a similar shutdown.
The spokesperson for PayPal Dan Schulman reportedly told Reuters the shutdown would “ensure that account balances are dispersed in line with applicable laws.”
Private companies have come under pressure to suspend operations in Russia due to the Vladimir Putin’s war. Crypto firms have also faced calls to unilaterally block all Russian residents from using their services.
CEO of crypto exchange Kraken, Jesse Powell said the company would comply with sanctions if legally forced to (his exchange was not formally asked). Ukraine has asked Coinbase, Binance, Huobi, KuCoin, Bybit, Gate.io, Whitebit and Ukraine-based Kuna to block all Russian accounts.
The question as to whether normal everyday Russian citizens should pay the price for the reckless actions of a dictator remains an open one.
In a statement, Russia’s central bank said that Visa and Mastercard would continue to operate despite credit cad processors suspension of services.
“Operations on them are processed within the country in the National Payment Card System, and sanctions do not affect them,” the central bank said. “Customer funds on accounts linked to such cards are fully preserved and available.”
Cross border transactions are not expected to work.
As geo-political conflict results in de-globalising money trends, both bitcoin and litecoin’s globalising nature continues unabated.
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