As a result of Russia's military strikes against Ukraine, European Commission President Ursula von der Ruin announced that sanctions would be imposed on Russia and that Russia would be delisted from the SWIFT system.
In a statement, European Commission President Ryan said.
The EU and its partners are trying to limit Putin’s ability to finance the war. We promised EU leaders that a certain number of Russian banks were cut off from the international financial system and removed from SWIFT with the aim of undermining their ability to operate globally.
Leyen said SWIFT is the world's most extensive interbank payment system and if Russia is removed, they could effectively block their exports and imports.
In a statement on the subject, SWIFT said that its institutions do not have the right to impose sanctions and that they must comply with EU regulations.
The leaders of France, Germany, Italy, the United Kingdom, Canada and the United States share the following views on the defense of Ukraine against Russia.
We will hold Russia accountable and ensure that this war is a strategic failure for Putin.
What is SWIFT (Society for Worldwide Interbank Financial Telecommunication)?
Founded in 1973, SWIFT is the name of the messaging system used by more than 11,000 banks and financial institutions from over 200 countries/regions, headquartered in Belgium, to help transfer funds between banks around the world.
SWIFT was created by US and European banks who did not want a single institution to develop their own system, and is jointly supervised by the Belgian Central Bank and central banks around the world.
In the SWIFT system, trillions of dollars are transferred every day and more than 40 million messages are sent every day. More than 1% of these messages are thought to be used by Russians.
In SWIFT, which is known to require three banks to transfer money through the system, each bank needs a SWIFT code for the transaction. The bank first receives the money from the transferring bank and directs it to the receiving bank to make the transaction.
Removal of Russia from the SWIFT system
If Russian institutions and banks are removed from SWIFT, they will not be able to use the smooth and instant transactions that they usually offer. Companies dealing with Russian banks will have to access them directly, resulting in delays and additional costs.
If worried, save it in bitcoin
It is speculated that removing Russian banks from the SWIFT system could be an opportunity for the rich to escape to cryptocurrencies. The security and low cost of the blockchain system makes this estimate reasonable, considering that Russians will now be making more costly transactions in remittances.
Mati Greenspan, founder and CEO of financial advisory firm Quantum Economics.
If rich people are worried about their accounts being frozen due to sanctions, they can keep their wealth in Bitcoin for protection.
Anticipating this situation, Ukraine's Deputy Prime Minister and Minister of Digital Transformation Mikhailo Fedorov asked all major cryptocurrency exchanges to block the addresses of Russian users.
Ukraine asks cryptocurrency exchanges to block Russian investors' accounts
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