Steps that Turkish lenders Işbank and DenizBank took to suspend the use of the Russian payment system Mir make a lot of sense, a senior U.S. administration official said on Tuesday, adding that the United States expects more banks will cut off Mir over sanctions risk.
Işbank and DenizBank on Monday announced separately they had suspended the use of Mir after the United States warned it would target people and entities if they are found helping Moscow skirt financial sanctions.
Washington expanded its sanctions last week to include the head of the entity running the payment system, which is popular with the tens of thousands of Russian tourists who arrived in Türkiye this year.
The suspension by two of the five Turkish banks that had been using Mir reflects their efforts to avoid the financial crossfire between the West and Russia, as the Turkish government takes a balanced diplomatic stance.
“The steps these banks took make a lot of sense. Cutting off Mir is one of the best ways to protect a bank from the sanctions risk that comes from doing business with Russia,” the U.S. official said, speaking on condition of anonymity. “We expect more banks to cut off Mir because they don’t want to risk being on the wrong side of the coalition’s sanctions.”
The importance of Mir cards for Russians rose substantially this year after U.S. payments firms Visa and Mastercard suspended operations in Russia and their cards issued in Russia stopped working abroad.
In addition to Türkiye, Cuba, South Korea, Vietnam and a handful of former Soviet republics accept Mir, which means both “peace” and “world” in Russian, with others such as Iran intending to follow suit soon.
Washington and its allies have imposed several rafts of sanctions targeting Moscow following Russia’s Feb. 24 invasion of Ukraine, including targeting Russian banks and President Vladimir Putin.
NATO member Türkiye has close ties with both Moscow and Kyiv, its Black Sea neighbors. It has criticized Moscow’s invasion and provided Ukraine with arms, including drones, which played a significant role in deterring a Russian advance early in the conflict, while refusing to join the West in imposing sanctions on Russia – a stance that has helped its mediation efforts reap results.
Western nations are growing concerned over increased economic ties between Türkiye and Russia, diplomats say, particularly after several meetings between leaders Recep Tayyip Erdoğan and Vladimir Putin, including last week in Uzbekistan.
Last month the U.S. Treasury sent a letter to big Turkish businesses warning they risked penalties if they maintained commercial ties with sanctioned Russians.
Turkish Finance Minister Nureddin Nebati at the time called concerns over the letter “meaningless.” In April, he said Russian tourists – critical to Türkiye's economy – could easily make payments since the Mir system was growing among Türkiye's banks.
Many Russians have gone to Türkiye since the February invasion left them with few other travel options, and sanctions cut off their use of major U.S. credit cards.
Though the two private lenders suspended Mir, it is still operated by state lenders Halkbank, VakifBank and Ziraat.