The central bank of Venezuela will develop an independent national payment system to get rid of international giants Visa and Mastercard in response to US sanctions, according to local media citing the regulator.
The document, which also separately mentions multi-national debit card service Maestro owned by Mastercard, orders a suspension of debit card operations starting November 2019 and payments via credit cards from January 2020.
The joint order was reportedly issued on May 16 by the central bank and Superintendency of the Institutions of the Banking Sector of Venezuela (SUDEBAN), responsible for ensuring the country’s banks comply with local regulations. It instructs the banks to create a “sovereign” system to process financial operations that will use clients’ biometric data.
The move comes in response to US sanctions against the country as the regulator anticipates that Visa and Mastercard will stop doing business in Venezuela under the pressure from Washington. It was earlier reported that the Trump administration is eyeing to prohibit the two payment systems and other financial institutions from processing transactions in the Bolivarian Republic.
The US has been tightening its grip on Venezuela, trying to choke the country’s economy with sanctions targeting its vital energy sector. It comes as the Trump administration continues backing self-proclaimed leader Juan Guaido and tries to oust President Nicolas Maduro.
The sanctions forced Venezuela to stop using the US dollar for its international transactions since October last year and switch to other currencies. The restrictions have deprived the country of around $130 billion since 2015 through to 2018, according to Venezuela’s envoy to Russia, Carlos Rafael Faria Tortosa.