Over the last week, we have heard disturbing news stories about the escalating conflict between Russia and Ukraine. As Russia launches a full-scale invasion of Ukraine, global financial markets are experiencing adverse impacts.
At the same time, tensions are rising at an international level. Russia is threatening the West for its potential aid and help to Ukraine. At the same time, the Western world and America are imposing new sanctions on Russia to punish the country for its military operations.
US President Joe Biden and his allies from the European countries are imposing a range of severe sanctions on Russia. The EU is freezing Russian assets and it also plans to deny Russian banks access to the global financial market. The US is also limiting Russia’s business ability in Dollars and other global currencies. As a consequence, the Russian economy has dropped by a significant margin.
A potential ban of Russia from SWIFT
At the same time, the international stakeholders have refrained from cutting Russia’s partnership with SWIFT. But the option can still be considered in the coming days if the tensions are not eased in the war zone. Russia’s expulsion from SWIFT will disconnect the country from the rest of the world.
SWIFT allows cross-border payments and handles over 5 billion financial messages annually. It allows the smooth flow of international trade. Therefore, it is incredibly important for the global business community. A sanction over this service could seriously hurt the Russian business and trade sector.
A ban from SWIFT could hurt Russia’s access and connection with global banks. Joe Biden suggested that they are not ready to impose this sanction yet. However, SWIFT is more linked with the European world and does not fall under US law.
Russia could face serious problems in its import and export payments if it is expelled from SWIFT. It could become risky and very costly. However, the country also has an option of cryptocurrencies if anything of this sort actually happens. Cryptocurrencies are vouched and advocated as an effective global payment and transaction network. It can be testing asking for crypto to serve as an alternative in Russia.
There is still no such development in this regard. The crypto market has suffered from a dip because of the ongoing conflict in the two countries. Therefore, if it leads to Russia’s crypto adoption, it could be something really big for the digital asset industry. Cryptocurrencies will then have to serve increasing demand from one of the biggest global economies.
