‘A Bigger Earthquake Than SWIFT’—What The Russia PayPal, Visa And Mastercard Ban Means For Bitcoin And Crypto Amid Extreme Price Swings


Bitcoin and cryptocurrencies have become the center of attention over the past week as global financial sanctions against Russia come into effect.

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Bitcoin price had bounced higher with expectations sanctioned russians could turn to bitcoin and crypto but backed off as following comments from Fed Chairman Jerome Powell.

Now the world’s largest payment card networks Visa and Mastercard, as well as internet payment giant PayPal, have suspended their services in Russia, with the moves described by one crypto expert as “another earthquake.” Bigger than [the] SWIFT ban”.

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“We are forced to act following Russia’s unprovoked invasion of Ukraine and the unacceptable events we have witnessed,” Visa CEO Alfred Kelly said in a statement, adding that the company would discontinue transactions “within the next few weeks.” days”.

“We do not make this decision lightly,” Mastercard said in a statement. “Mastercard has been operating in Russia for more than 25 years.”

Credit and debit cards issued by Russian banks will no longer work outside the country, while Russian companies and ATMs will not be able to accept cards issued from outside the country.

There have been local media reports that Russia’s Sberbank will start issuing cards with China’s UnionPay. Meanwhile, Russia’s alternative payment network to Visa and Mastercard that was founded in 2015 is believed to have only a 30% market share in the country, according to data from Russia’s central bank.

The Visa and Mastercard ban comes after PayPal shut down its services in Russia this weekend, just a week after Russia was kicked out of the world’s leading international payment network, SWIFT.

“PayPal stands with the Ukrainian people and stands with the international community in condemning Russia’s violent military aggression in Ukraine,” PayPal CEO Dan Schulman said.

“[The Visa and Mastercard shutdown] is an earthquake bigger than SWIFT,” tech lawyer Preston Byrne aware to Twitter, adding that “trillions of dollars will be made by building a mirror system that doesn’t respond to US pressure.”

Over the last week, trading between the Russian ruble and cryptocurrencies has skyrocketed, according to data from Chainalysis, a cryptocurrency research firm.

“Every cultural sphere other than the US or China will build national stacks for social media, shopping and the like as part of their digital defense strategy,” tech investor Balaji Srinivasan foretold via Twitter. “But they won’t have the scale to be globally competitive on their own. They’ll have to connect to bitcoin/web3 for that.”

The relatively anonymous nature of bitcoin and other cryptocurrencies, combined with their decentralized structure, means that countries and cryptocurrency companies cannot lock users out of the system in the same way that the traditional financial industry can.

Some of the world’s largest crypto firms and exchanges have come under pressure to block access to their services from Russia, however, US-based Coinbase and Binance, the world’s largest crypto exchange, They have so far refused.

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Binance founder and CEO Changpeng Zhao, often known simply as CZ, dismissed fears that Russia could use bitcoin and crypto to evade sanctions, claiming “crypto is too small for Russia.”

“Currently, the media and politicians are putting a lot of effort and focus on crypto and sanctions,” CZ said in a statement.

“If you look at cryptocurrency adoption today, there are probably around 3% of the global population with some kind of exposure to cryptocurrency (i.e. owning any cryptocurrency). Of those, most only have a small percentage of cryptocurrency. their net worth in crypto. Less than 10% on average. So there’s probably only less than 0.3% of the global net worth in crypto today. This percentage applies equally to Russia.”

“We don’t think there is a high risk of Russian oligarchs using crypto to avoid sanctions,” said Coinbase CEO Brian Armstrong. aware to Twitter this week. “Because it’s an open ledger, trying to sneak a lot of money through crypto would be more traceable than using US dollars, cash, art, gold, or other assets.”

Last week, he was informed by the Wall Street Journal that the Biden administration is considering imposing sanctions on Russia’s bitcoin and cryptocurrency market.