Visa and Mastercard block Russian banks from their networks due to sanctions

Visa and Mastercard also pledged $2 million in humanitarian aid funds for Ukraine.

Photo: Karolis Kavolelis/Shutterstock

Payment and credit card giants Visa and Mastercard have blocked Russian financial institutions from their networks in response to sanctions against Russia after its invasion of Ukraine.

Last week, Russia launched an unprecedented invasion of Ukraine, forcing the United States and governments around the world to impose a series of sanctions aimed at isolating Moscow from the global financial system.

Last week, the US placed several Russian individuals and financial institutions on a sanctions list called the Specially Designated Nationals List.

In this way, the government effectively blocks US companies and individuals from doing business with any individual or entity on that list. Washington also sanctioned Russia’s central bank on Monday.

On Monday, Mastercard said it had blocked several financial institutions from its payment network, although it did not mention companies or individuals.. “We will continue to work with regulators in the coming days to fully meet our compliance obligations as they evolve,” the company said.

On the other hand, Visa also blocked those on the sanctions list, saying Tuesday that it was taking immediate steps to ensure compliance with applicable sanctions. and to be prepared to comply with any additional sanctions that may be implemented.

Visa and Mastercard also pledged $2 million in humanitarian aid funds for Ukraine.

The Visa and Mastercard blocks come after the United States, Canada and European allies agreed on Saturday to remove major Russian banks from the interbank messaging system, SWIFT. This means that Russian banks will not be able to securely communicate with banks beyond their borders.

The extensive sanctions have caused a drop in the value of the Russian ruble. Citizens in Russia have also been waiting in long lines to withdraw cash from ATMs.

Meanwhile, Ukraine’s Deputy Prime Minister Mykhailo Fedorov called on cryptocurrency exchanges to block addresses of Russian users.

Bitcoin and other digital currencies could become a means for Russians to circumvent sanctions and get their money out of the countryas cryptocurrencies are not owned or controlled by a single entity such as a central bank.

Binance, the world’s largest exchange, has said it will block the accounts of Russian individuals who have been sanctioned, but stressed that it will not unilaterally freeze the accounts of all Russian users.

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