“SWIFT is a behemoth in the financial-communications industry thanks to its ease of use, speed, and security. It can help banks complete cross-border payments in under five minutes and offers end-to-end tracking.
“‘It is the most trusted kind of cross-border payment-messaging system out there, and so it’s hugely important,’ said Brian O’Toole, a former senior adviser at the U.S. Treasury Department.”
If U.S. and European leaders agree, they could kick Russia off SWIFT, and thus Russian companies and the government might effectively be detached from the financial system of the rest of the world.
In other words, it would make it harder — how much harder is a question debated by experts — for Russian corporations or the government to buy stuff or get money.
Western leaders, at the urging of former President Donald Trump, in 2018 cut Iranian banks out of SWIFT.
But President Joe Biden made it clear in his Thursday remarks that some European governments aren’t totally on board with dropping Russia even after its invasion of Ukraine. All reporting points to the resisters being Germany, which famously has been cozy with Russia’s energy industry, and Italy.
One German objection is that the action would affect all Russians, not merely the government and its friends.
GERMAN FOREIGN MINISTER BAERBOCK SAYS CUTTING OFF RUSSIA FROM SWIFT WOULD MEAN THAT ORDINARY PEOPLE CAN NO LONGER TRANSFER MONEY TO RELATIVES IN RUSSIA – RTRS
— Fabrizio Goria (@FGoria) February 25, 2022
Of course, one of the ways sanctions work is by harming an economy so much the public ceases to tolerate the regime’s bad actions.
Others add Putin has alternative ways to get and send money, so this action wouldn’t harm the regime that much. Cutting Russia out of SWIFT could push it toward China.
Interview w Xu Wenhong, Chinese Academy of Social Sciences researcher, on implications for China if Russia were kicked out of SWIFT: it'll boost the use of China's CIPS system, internationalise the RMB, & "establish a new int'l financial & economic order"https://t.co/Vs3uxisPC0
— Mary Hui (@maryhui) February 25, 2022