What is SWIFT? And how will cutting off Russia from the banking system help Ukraine?
In a joint statement, the Western allies moved to block Russia’s access to the SWIFT international payment system as it continues its assault against Ukraine.
The messages are secure so that payment instructions are typically honored without question. This allows banks to process high volumes of transactions at speed. Russian banks could use other channels for payments such as phones, messaging apps or email. That would let Russian banks make payments via banks in countries which have not imposed sanctions but since alternatives are likely to be less efficient and secure, transaction volumes could fall and costs rise.Exporters would find selling goods to Russia riskier and more expensive.
But when it comes to Russian oil and gas, foreign buyers could find it harder to find replacement suppliers.
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