The Central Bank of Russia claims that an alternative to its SWIFT payments network is ready, but is unlikely to see significant participation from foreign entities.
The Central Bank of Russia claims that an alternative to its SWIFT network is ready. Russian state-owned media TASS reports that the Bank of Russia's System for the Transmission of Financial Information (SPFS) is ready for foreign participation.
However, this development is unlikely to have much of an impact on Russia and its declining economy. In addition to not having the importance and influence of SWIFT, the Russian government is now almost universally seen as the aggressor and brands are pulling out of the country.
Shares of Sberbank, Russia's largest bank, fell 74%, its biggest drop ever. The ECB also noted that the bank is about to fail or will fail soon. It is experiencing a massive outflow of deposits, and Deutsche Börse has said it will suspend trading in Sberbank as well as several other Russian securities.
Meanwhile, the Russian ruble has experienced a sharp decline and is now worth less than a cent. There are concerns that this could lead to hyperinflation, and that a strong inflationary trend is almost certain in the coming months anyway.
Russia's economic pain is just beginning
The actions taken by the West to punish Russia for its invasion of Ukraine are unprecedented, and their impact is unprecedented. Analysts believe that the most serious repercussions will only occur in the coming weeks and months. Others believe Russia will not see cryptocurrencies as a solution.
In an attempt to stop the bloodshed, the Russian government has raised interest rates to 20 percent while asking the Moscow Stock Exchange to close until March 5. However, this won't help and the interest rates will only mean that consumers can pay double for such things as pledges.
The United States also does not want Russia to avoid sanctions through the use of cryptocurrencies. At the request of Ukrainian Deputy Prime Minister Mykhailo Fedorov, cryptocurrency entities have blocked or restricted their cryptocurrency services in Russia. Cryptocurrency has frozen the accounts of Russian sanctioners, but not all users.
All information contained on our website is published in good faith and for general information purposes only. Any action taken by readers with respect to the information on our website is entirely at their own risk.