Can’t Buy Crypto with Credit Cards – Users React to Russia’s Credit Card Ban

As cryptocurrency exchanges and financial services firms stop doing business with Russian users, they may soon no longer be able to accept transactions done with many major credit cards.

On Saturday, Visa, Mastercard and PayPal announced they would suspend their operations in Russia following Russia's military action against Ukraine. Visa called Russia's actions an "unprovoked invasion," while Mastercard said its decision was made in support of the Ukrainian people. American Express issued a similar statement the next day, saying it would cease business in Russia and neighboring Belarus.

Apple Pay and Google Pay have reportedly restricted service for some Russians, though users may also be unable to use the aforementioned credit cards for transactions on the two payment apps.

We thank @Dan_Schulman for standing by Ukraine and suspending operations in Russia. This will make a huge difference. @PayPal, we welcome you to Ukraine! Your presence will provide more financial freedom to 40 million Ukrainians in these difficult times.

— Mykhailo Fedorov (@FedorovMykhailo) March 8, 2022

The decision by the three major U.S. credit card companies and others to stop operating in Russia appears to have nothing to do with efforts to comply with economic sanctions that have targeted certain Russian banks and wealthy individuals. Coinbase announced on Sunday that it had blocked more than 25,000 wallet addresses "related to Russian individuals or entities it believes to be engaging in illicit activity," but the company had not publicly responded to the credit card ban as of press time.

With the change in company policy, it appears that ordinary Russians who use Visa or Amex credit cards abroad or at home will no longer be able to use them for everyday transactions. Mastercards issued by Russian banks will no longer be supported by the company's network, while Mastercards issued by other foreign banks "will not be accepted at merchants or ATMs in Russia."

“We do not take this decision lightly,” said Mastercard, which has done business in Russia for more than 25 years.

However, Russia's central bank issued a statement on Sunday saying that MasterCard and Visa cards will "continue to operate normally in Russia until their expiry" and that users can use ATMs and make payments. Given the credit card companies' statements, it's not clear how the Bank of Russia came to that conclusion, but it acknowledged that cross-border payments and using the cards in person abroad is impossible.

While the companies did not provide an exact timeline for the complete cessation of operations, at least one cryptocurrency exchange warned users of the change, which could affect many Russian users. On Tuesday, Binance announced that starting Wednesday, the exchange will no longer be able to accept MasterCard and Visa cards issued in Russia, and the company will not accept American Express.

This is out of our control. Not our decision.

— CZ Binance (@cz_binance) March 8, 2022

Presumably, all consumers wishing to purchase cryptocurrencies through an exchange with a credit card issued by one of these companies in Russia will soon be unable to do so, but it appears peer-to-peer transactions will still be available. Reaction to the decision was mixed on social media, with many claiming that credit card companies could help Ukraine by hurting Russia economically, but at the expense of civilians who have no say in their own country's military actions.

Marty Bent, co-founder of crypto mining company Great American mining, said: "It is a crime to prevent Russian citizens who are trying to flee Russia from accessing their funds. Visa and Mastercard are politicizing their own products and pushing people all over the world. Bitcoin, it’s digging its own grave.”

"For those who stay in Russia, the cards can continue to be used, but you can't leave because you won't be able to pay for anything," said Inna, a Twitter user who claimed to live in Moscow.

Like I warned about two weeks ago. Cryptocurrencies are the only way. Visa and Mastercard have shown the world how unstable, irrelevant, centralized and politicized they are by ditching the Russians who are far from the war and Russia. This is modern fascism.

— AntiDanilevski (@AntiDanilevski) March 6, 2022

While cutting off Visa and Mastercard appears to be a major blow to Russia and its residents, there are reports that Russia may switch to Chinese payment systems such as UnionPay — the payment system accepted by peer-to-peer cryptocurrency exchange Paxful. Russia's central bank also has its own Mir card for payments domestically and in nine countries including Belarus and Vietnam.

Regulators have yet to issue guidelines to cryptocurrency exchanges aimed at cutting off Russian users from trading cryptocurrencies. Both the U.S. and the European Union have signaled they will be concerned about Russia's possible use of digital currency transactions to evade sanctions. Leaders of many exchanges, including Kraken, issued statements saying they would abide by the government's guidance but would not unilaterally block all Russian users.

Cointelegraph Chinese is a blockchain news information platform, and the information provided only represents the author's personal opinion, has nothing to do with the position of the Cointelegraph Chinese platform, and does not constitute any investment and financial advice. Readers are requested to establish correct currency concepts and investment concepts, and earnestly raise risk awareness.