Binance said in a blog post today that Visa and Mastercard credit cards issued in Russia would no longer be accepted as payment methods on its cryptocurrency exchange. It was also implied that Russian consumers will be unable to use Mastercard and Visa cards issued by institutions outside of Russia.
According to the announcement’s wording, the ban applies to any transactions initiated using those cards. The new policy will start today. The new regulations are taking effect at 9:00 p.m. UTC on March 9th.
It is unclear if the limits would apply to subsidiaries of Binance that accept credit cards. As an example, we have the company’s recently established Bifinity payments service.
Binance Blocking Russian financial institutions
The reason for the new policy, according to Binance’s article, is the recent actions by Visa and Mastercard. Visa and Mastercard stated on Saturday that they will halt business in Russia. They are protesting against Russia’s invasion of Ukraine.
Changpeng Zhao, the CEO of Binance, also suggested that the policy modification was an act of compliance. After the announcement, he posted on Twitter that they had no control over the decision. He also stated that it was not their choice.
Binance CEO Changpeng Zhao earlier termed a comprehensive ban on Russian users immoral. He noted that the company will mostly follow government restrictions.
The ban on Mastercard and Visa cards not stopping domestic purchases
The measure from a few days ago today does not appear to be a complete ban on Russian clients. Russian users may finance their Binance accounts using a variety of methods. Those methods include bank transfers, third-party payment processors, and cryptocurrency deposits.
Nonetheless, the announcement implies that the number of alternatives accessible to Russian investors is steadily diminishing.
The announcement comes only days after Coinbase stated that it had blacklisted 25,000 Russian-linked addresses. It also comes days after claims of widespread Russian IP blocks across South Korean exchanges.
After the slapped sanctions against Russian banks on Saturday, Mir claimed it had already witnessed a spike in demand for its cards. Mir is Russia’s payments system.
As of September 2021, more than half of Russians had a Mir card. It was accounting for 32% of all transactions, according to the company’s figures.
The rapid adoption is expected to confirm critics’ suspicions that the penalties are not that good. The economic penalties would only encourage Russia to invest in alternate projects.
Blocking Russia from SWIFT has sparked similar fears. There is a possible growth of alternatives such as Russia’s analogous SPFS system. SWIFT is the secure communication system used by banks for cross-border payments.
On Wednesday, PayPal suspended enrolling new clients in Russia. On Saturday, it announced that its services there, mostly consumer money transfers, had been blocked.
Paypal went on to say that withdrawals will be permitted for some time. The company stated that account balances are distributed following existing rules and regulations.
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