- SWIFT payment network is a dominant system for global financial transactions
- West, Europe now considering banning Russia from SWIFT
- However, banning Russia from SWIFT will have impact on other nations as well
Already facing several sanctions for launching a war against Ukraine, Russia may also be kicked out of the SWIFT payment network, the dominant system for global financial transactions.
European ministers have said further sanctions are possible, including kicking Russia out of SWIFT. Separately, Canadian Prime Minister Justin Trudeau said Canada supports the removal of Russia from the SWIFT banking system.
Italy has also said it is ready to support Russia's disconnection from SWIFT and provide military aid to Ukraine.
What is SWIFT payment network?
The SWIFT (Society for Worldwide Interbank Financial Telecommunication) payment network is a boon for the smooth transaction of money worldwide. It allows rapid transfer of money across borders.
The system was launched in 1973, based in Belgium. The payment transaction system involves 11,000 banks and institutions in more than 20 countries.
Created by American and European banks, the entire system is overseen by the National Bank of Belgium in partnership with US Federal Reserve and the Bank of England and other Central banks around the world.
If Russia is banned from SWIFT payment network, used by several financial institutions, it would hit the country's banking system and access to funds.
However, banning Moscow for SWIFT will not be just one-sided damage, but it will also have an impact on other nations, companies, for buying oil and gas from Russia.
EU foreign affairs chief Josep Borell said that the proposal to ban Russia from SWIFT was brought but it didn't get the required support... but it remained a possibility in future.
Ukrainian President Volodymy Zelensky has urged the world to completely sideline, cut off Russia which will hit it economically.
Meanwhile, Russia has imposed its own tit-for-tat measures, banning British flights to and over its territory in retaliation to a similar U.K. ban on Aeroflot flights.
Russian authorities announced the “partial restriction” of access to Facebook after the social media network limited the accounts of several Kremlin-backed media.