FYI

 

What is SWIFT and how is it being used against Russia?

"The United States, the European Union, the United Kingdom and Canada said in a joint statement on Saturday that they would disconnect "selected" Russian banks from SWIFT in order to punish Russia for invading its neighbor."

(The discerning mind ask, Why No Australia or New Zealand?)

"This will ensure that these banks are disconnected from the international financial system and harm their ability to operate globally," said the Western powers.

(And others say it's going to backfire)

"SWIFT doesn't move money around the world. What it does is allow banks to send each other instructions on how to transfer funds across borders. With no globally accepted alternative, it is essential plumbing for global finance."

"Disconnecting an entire country from SWIFT is considered the nuclear option of economic sanctions."

"But even limited action can have a big impact. Any bank disconnected from SWIFT will have a very difficult time sending money to other financial institutions, and its customers will struggle to conduct their business."

"But such a dramatic move would also hurt the West.

The United States and Germany have the most to lose if Russia is entirely disconnected, because their banks use SWIFT most frequently to communicate with Russian banks, according to Shagina.

Senior Russian lawmakers have said that shipments of oil, gas and metals to Europe would stop if the communication channel is disrupted.

(Think inflation is bad now?)

"If Russia is disconnected from SWIFT, then we will not receive [foreign] currency, but buyers, European countries in the first place, will not receive our goods — oil, gas, metals and other important components," Nikolai Zhuravlev, vice speaker of Russia's upper house of parliament, said recently, according to state media outlet TASS.

(See above)

"Are there any alternatives to SWIFT?

Russia has taken steps in recent years to blunt the trauma should sanctions include SWIFT."

(Long game alert)

"Moscow established its own payment system, SPFS, after it was hit by Western sanctions in 2014 following its annexation of Crimea. SPFS now has around 400 users..."

"China's fledgling Cross-Border Interbank Payment System, or CIPS, may provide another alternative to SWIFT. Moscow could also be forced to resort to using cryptocurrencies."

"But these are not appealing alternatives as neither system has a significant global presence."