As the Ukraine invasion continues, the number of countries backing Russia’s expulsion from the SWIFT payments system increased on Saturday. The question now is whether Moscow will use digital assets to circumvent punishing economic sanctions.
High-ranking Ukrainian authorities indicated in a series of tweets that several countries, including France, Croatia, and Italy, supported Russia’s exclusion from SWIFT.
According to Reuters, Lithuanian Prime Minister Ingrida Simonyte claimed the West and its allies were getting closer to restricting Russia’s access. Canada, the United States, the United Kingdom, and the European Union have all lately discussed the prospect of Russia being kicked out of the system as part of new penalties.
This week, NATO countries put Russia’s top banks and numerous members of President Vladimir Putin’s inner circle on a no-fly list. So, Even as fighting erupted in Kyiv, they held off on suspending Russia from the SWIFT network.
More so, banks would be unable to lawfully transact with their overseas counterparts if they did not have access to SWIFT. That’s, By shutting off the country’s access to foreign cash, the measure will put economic pressure on it. Thereby, limiting its ability to trade.
However, doing so may encourage the country to use cryptocurrency for international commerce. So, Regulators currently have no way of preventing transactions made using non-centralized wallets.
So, President of the European Central Bank Christine Lagarde recently urged for legislation to regulate cryptocurrency use in the EU. Thereby, citing the possibility for Russia to use it to evade sanctions. This comes as concern over Russia’s next move grows.
Over the last year, cryptocurrency use has skyrocketed in Russia. Lastly, Russian firms possess nearly 12% of the world’s assets, according to government data.
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