Kyrgyzstan hits pause on Russian Mir cards amid US sanction fears
Kyrgyzstan has temporarily halted the use of Russian Mir payment cards, although the service could be reinstated, according to "The Moscow Times." Akylbek Japarov, the Chairman of the Kyrgyz Cabinet of Ministers, stated, "We cannot completely sever our trade relations with Russia."
Apr 7, 2024 | updated: 5:05 AM EDT, April 8, 2024
The Russian payment system encountered additional setbacks as the Kyrgyz company Interbank Processing Center (IPC) announced its decision to suspend the servicing of Mir bank cards issued in Moscow starting Friday. This decision was made in response to adherence to sanctions imposed by the United States.
Kyrgyzstan halts Mir card services
Quoted by "The Moscow Times," Akylbek Japarov revealed to local parliamentarians that the Latvian software provider for IPC pressured Bishkek into discontinuing support for the Russian Mir system.
"The software for IPC is developed by a Latvian company. They sent us a letter asserting that if we do not stop accepting Mir cards, they will disconnect us from the IPC system," Japarov explained.
That's why we temporarily suspended [Mir card services] - he clarified.
Potential resumption of Mir card services?
The Prime Minister suggested that Bishkek could employ "various mechanisms and measures" to resume the operation of the Mir system while evading sanctions. However, implementing these solutions cannot happen immediately.
The issue of Russian cards might be discussed with the USA. Japarov announced that during a forthcoming visit to Washington in the latter half of April, he intends "to clarify the situation" with American counterparts.
"We cannot entirely halt our trade and economic relationships with Russia, as they are our strategic partner," Japarov proclaimed to the Kyrgyz parliamentarians.
"But unfortunately, companies under sanctions could jeopardize our monetary system. We must navigate this issue with great care," he added.
Additional setbacks for the Mir system
The suspension of Mir card services in Kyrgyzstan marks yet another challenge for the Russian payment system, which emerged as an alternative for Russian travelers after their Visa and Mastercard stopped functioning abroad due to the invasion of Ukraine.
Similarly, banks in Kazakhstan ceased accepting Russian Mir cards, with ForteBank citing "the need to mitigate risks in cross-border payments" as its reason. Armenia made a comparable decision. The United States Treasury Department has warned banks outside the United States that servicing Mir cards may result in "supporting Russian efforts to evade U.S. sanctions."
The Russian payment system is actively seeking new partners in the so-called "banking darknet" to sidestep sanctions and maintain the functionality of Mir cards overseas. However, Russia finds itself with limited allies in this endeavor, engaging in discussions with banks from Iran, Cuba, Venezuela, and Syria.
