Crisis in Ukraine Displays US Power Over Payment Systems

Ukraine has returned to the top of the news agenda, with pro-Russian separatists occupying government buildings in the east of the country.

But using the levers of global finance, the conflict, with Europe and the US on one side and Russia on the other, is as much an economic battle as a physical one.

And with Russia now set on creating a new national payment system (NPS) to replace Visa and MasterCard, this fight is a reminder of the fundamental difference between the new world of decentralized digital currencies and the old world, where governments use payment systems as weapons of war.

The American monopoly on transactions

Visa and MasterCard account for 85% of the market share of global transactions in 2013. Although both are private companies, they are subject primarily to American law, which includes political sanctions against other countries.

The two effectively represent a de-facto monopoly on US transactions, and reminded Russian president Vladimir Putin of it after Russia annexed Crimea, when they halted credit card services to four banks linked to Russians targeted by US sanctions… Read more at CoinDesk.

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