The White House, along with the European Commission, Canada, the United Kingdom, Germany and Italy, announced on Saturday evening that they will delist certain Russian banks from the SWIFT payment system.

In a joint statement, the parties wrote.

“This will ensure that these banks are disconnected from the international financial system and undermine their ability to operate globally.” It also promises […] “Restrictive measures will prevent the Russian Central Bank from deploying its international reserves in a way that undermines the impact of our sanctions.”

Going further, the current President of the European Commission, Ursula von der Leyen, revealed that

“…… We will work to ban Russian oligarchs from using their financial assets in our markets. Putin has embarked on a path designed to destroy Ukraine. But in fact, he is also doing what he is doing to destroy the future of his own country.”

Let's open the inventory.

Russia deported by SWIFT

SWIFT is by far the largest financial messaging system, used by more than 11,000 institutions worldwide.

After Russia's invasion of Ukraine, the EU and its partners began imposing sanctions on the country, its president Vladimir Putin and certain political representatives.

The exclusion of Russia from SWIFT is intended to weaken the country's ability to clear assets and transfer funds across member institutions of the system. This move is intended to isolate and punish the country.

In essence, without SWIFT, banks and their customers would find it more difficult (if possible) to operate globally.

What else is there?

There are numerous reports indicating that Russia has been working on an alternative to SWIFT for some time.

Earlier today, Asia Markets reported that Russia already has an alternative – CIPS. Short for Cross-Border Interbank Payments System, this is China's international payment solution, first revealed back in 2015. .

The report also outlines that at least 23 Russian banks have connected to CIPS.

However, China's actions during the conflict were not very decisive, which is difficult to interpret. On the one hand, the country claims to be the protector of its sovereign independence, but on the other hand, it remains reluctant to condemn Russia's actions.

Go to Cryptocurrency

What does this mean for cryptocurrencies? Well, it's also hard to determine or predict.

Price discussions and speculation aside, I think that if Russia decides to use cryptocurrencies as an alternative payment network, this will put enormous pressure on regulators in Western countries.

We have seen many legislative frameworks in developed countries scrutinize cryptocurrencies. The past year is a vivid example of this, as major cryptocurrency exchanges rush to validate their trading volumes to avoid harsh sanctions or becoming unscrupulous.

The West's position on the current conflict in Ukraine is very clear – they are doing everything they can to cut Russia's financial arms off from other developed countries, even imposing personal sanctions. If Russia turns to cryptocurrencies, I think it's clear that the regulatory environment will become even tougher.

But that's not necessarily bad news. In fact, many cryptocurrency proponents have long been pushing for clear regulations. In our podcast with BitMEX CEO Alex Hoeptner, he said he thinks regulators may be wrong to put cryptocurrencies in the same regulatory basket as traditional assets in the first place. He also argued that rules are needed for the industry to move forward.

But that's not necessarily good news. It is also important to consider the West's condemnation of cryptocurrencies as a pro-Russian tool to bypass sanctions.

As I mentioned at the beginning, it's completely impossible to be sure (at least for me) of any potential outcome, but I think one thing is for sure – we face a lot of uncertainty.

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