EU & USA Punish Russia by Banning Some Russian Banks from SWIFT

by Leah Rosenberg

This is a huge move that can have global implications, way beyond Russia. Until the last moment, Western European governments and the United States did not know whether to take this punitive action. This can majorly disrupt the world’s financial market as we have known.

What will the implications be if Russia doesn’t have access to SWIFT? What will end up happening to Russia? How will this impact all of us?

Without access to SWIFT, Russia and its financial institutions would be effectively cut off from most international business transactions. For example, Russia would be unable to secure profits from international sales of its oil and gas production — deals that comprise more than 40% of the country’s revenue.

Potential Impact: Being excluded from SWIFT, Russia is likely to expand is own SPFS system for processing international payments. The main partner of Russia’s SPFS is China, whose own cross-border payment system, Cips which is connected to SFPS. This could cause the two to get closer and weaken the US $.

There is also a fear that it could damage the US dollar’s status as the global reserve currency and accelerate the use of alternatives such as cryptocurrencies or federal digital currencies.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More