Indonesia to pull the plug on Visa and Mastercard, president calls them a 'problem'

Bank of Indonesia is getting rey to transition away from Visa and Mastercard while developing its indigenous payment platform, as reported by Antara news agency on Monday. 

Joko Widodo, president of Indonesia, pushed local agencies and authorities last week to switch from using international payment systems to employing cards that are authorised by local banks. 

He me case that Indonesia needs to protect itself against geopolitical and international upheavals by mentioning financial sector sanctions imposed on Russia by US, EU, and ir allies over Moscow's war against Ukraine, as reported by RT. 

'Be very careful,' says Indonesian President Joko Widodo

Indonesian president said: “Be very careful. We must remember sanctions imposed by US on Russia. Visa and Mastercard could be a problem,” RT reported.

Erwin Haryono, spokesman for central bank, discussed project and stated that regulator was in contact with regional companies “and progress is about 90%," ding that domestic cards will offer several benefits, such as lower costs.

He furr said that “offshore settlements and dependence on foreign payment networks such as US Visa or Mastercard will no longer be necessary", as reported by RT. 

Jakarta to learn from Washington's sanctions against Moscow 

Dodit Proboyakti, a board member of Indonesian Credit Cards Association (AKKI), told RIA Novosti that Jakarta would use knowledge gained from Russia's Mir payment service to vance country's domestic economic and financial network.

According to Steve Marta, executive director of AKKI, Indonesia's interbank system, GPN, needs significant modifications to fully accommodate credit cards and foreign transactions. GPN now only allows local debit cards.

Soon after US initially imposed sanctions on nation in 2014, Moscow launched its very own national card system, Mir, and developed domestic National Payment Card System (NSPK) to seamlessly take over all Visa and Mastercard transactions should US-based corporations decide to stop operating, as reported by RT. 

U.S. dollar to lose dominance due to Russian sanctions: IMF

Last year, Gita Gopinath, IMF's first deputy managing director, said that sanctions imposed by U.S. and or western nations against Moscow might destabilise world's financial system and undermine dominance of US dollar.

Gopinath thinks that severe restrictions imposed by Western nations in response to Russia's special operation in Ukraine may result in development of small currency blocs based on tre between particular groups of states.

Speaking to Financial Times, Gopinath said: "We are alrey seeing that with some countries renegotiating currency in which y get paid for tre." 

She later ded: " dollar would remain major global currency even in that landscape, but fragmentation at a smaller level is certainly quite possible."

US and its allies have placed tough and severe sanctions on Russia

Russian central bank has been subject to limitations, and export restrictions, selective banks have been cut off from SWIFT (an international payment gateway system), and all Russian flights have been using from using European or U.S. airspace. Many of ir businesses have stopped doing business in Russia.

US, UK, and EU have so far imposed sanctions on more than 1,000 Russian persons and companies.