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Why the West is reluctant to deny Russian banks access to SWIFT | The Economistarchive.fo/vQkAZ
10 sats \ 6 comments \ @cryptocoin 26 Feb 2022 bitcoin
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10 sats \ 0 replies \ @el_zonte 26 Feb 2022
The Economist seems pretty crap tbh.
Germany don't want Russia to be cut off from SWIFT because they are reliant on Russian gas since they decided not to have nuclear reactors.
That'll be why Germany are dragging their feet on it..
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0 sats \ 4 replies \ @cryptocoin OP 26 Feb 2022
Linked to an archive of the article, so that there is no paywall, no subscription required. Link to source article here:
Why the West is reluctant to deny Russian banks access to SWIFT https://www.economist.com/the-economist-explains/2022/02/25/why-the-west-is-reluctant-to-deny-russian-banks-access-to-swift
Leave it to the Economist to ignore bitcoin.
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0 sats \ 3 replies \ @cryptocoin OP 26 Feb 2022
For now the measure remains off the list of sanctions outlined by the West. Why the reluctance?
There are three reasons. Start with the impact on Russia. The Kremlin has been bracing itself for the possibility of being cut off from SWIFT since 2014, when America floated the idea as punishment for the invasion of Crimea. [...] And transactions would migrate en masse to SPFS, a Russian alternative to SWIFT that is not nearly as ubiquitous and sophisticated, but still usable. That would cause some disruption—but not disaster.
Second, the West, and European countries in particular, would face short-term costs. [...] Russia is the EU’s fifth-largest trading partner. It is the source of 35% of Europe’s gas supply and it is home to €310bn ($350bn) of EU assets. Cutting Russia off from SWIFT could make it harder for international buyers to pay for its energy supplies; it could also prompt Russian retaliation.
Last, using SWIFT as a weapon against Russia could hurt long-term American interests. America holds sway over international finance thanks to the dollar’s dominance and its pre-eminent role in global settlement systems. Further politicising SWIFT would give China an incentive to bolster CIPS, its rival to SWIFT for cross-border payments in yuan. It would also help China court any country with uneasy relations with America looking for alternatives.
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0 sats \ 2 replies \ @cryptocoin OP 26 Feb 2022
Editor’s note: this explainer was based on a longer article published in December.
The (barely) longer article:
The hidden costs of cutting Russia off from SWIFT https://www.economist.com/finance-and-economics/2021/12/18/the-hidden-costs-of-cutting-russia-off-from-swift https://archive.fo/7nNzJ
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0 sats \ 1 reply \ @cryptocoin OP 26 Feb 2022
Newly emerging dilemma: if America uses its international financial power to cut major countries like Russia out of SWIFT, it encourages them to start their own systems, eroding that same international financial power
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0 sats \ 0 replies \ @cryptocoin OP 26 Feb 2022
The system only works within Russia,[3] though there are plans to integrate the network with the China-based Cross-Border Inter-Bank Payments System.[4]
The Russian Government is also in talks to expand SPFS to developing countries such as Turkey and Iran.[6] Owing to its limitations, the SPFS system is seen as a last resort, rather than as a replacement for the SWIFT network.
SPFS https://en.wikipedia.org/wiki/SPFS
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