The increase in the price of oil and the sharp fall experienced by the European stock markets These were the first indirect consequences of the military operation in eastern Ukraine announced by the President of Russia, Vladimir Putin, and after the explosions in different parts of the country, such as Kiev.
Days ago, both from Washington and from Brussels, the Kremlin was warned on several occasions about the consequences that a Russian invasion would have in Ukraine, through harsh sanctions. The 27 that make up the Union are preparing to approve a new package of sanctions for Moscow, after the first block of sanctions established for the Russian economy together with the United Statess, which included some such as the limitation of commercial activities with the EUor the impossibility of financing in the European markets.
However, the new Western sanctions could come about not only from the economic point of view, which would also include sanctions on gas companies or financial entities, but also from the technological field. One of the tools that could be used by both Europe and the United States to cut off more lines of Russian financing is known as Society for World Interbank Financial Telecommunication (SWIFT).
Founded in 1973 and based in Belgium, it is a interbank messaging system used by thousands of entities from any field, both financial and non-financial, to send messages about payments made securely. This system connects a multitude of financial institutions around the world.
Disconnecting Russia from this system has been one of the requests made by the President of Ukraine, Volodymyr Zelensky, in his meeting with French President Emmanuel Macron. “We demand the disconnection of Russia from SWIFTthe introduction of a no-fly zone over Ukraine and other effective measures to stop the aggressor,” said the Ukrainian leader in his official twitter profile.
For the moment, neither the European Union nor the United States have authorized Russia’s withdrawal from the system. Faced with a possible withdrawal from the interbank network, Russia has launched two alternatives to finance itself. First, its own payment control system between financial entities (SPFS). The second option, in case of expulsion, would go through financing through cryptocurrencies.
Expulsion of banks from Iran in 2012 and 2018
The expulsion of Russia from the system would have catastrophic consequences for its economy, as well as its isolation from the international banking system. Any type of financial transaction carried out will be blocked, and exports and imports of different raw materials such as gas or oil will be affected.
It would not be the first time that it happens, since in the years 2012 and 2018, Iranian banks were kicked out of the system. First, due to the sanction of the European Union due to its nuclear program, while four years ago the economic sanctions established by the United States caused its expulsion.