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In the case of aggressive actions by the United States, Russia could try to close the Nord Stream 2 gas pipeline, subject to sanctions by Russian banks, exports of goods, Vladimir Putin’s immediate circle of people, energy producers, and deny Russian oligarchs access to foreign assets, reports media.
The most painful measure for Russia could be its disconnection from the international payment system SWIFT – only North Korea and Iran have had such an experience in the world so far.
Talks about Russia’s possible disconnection from SWIFT began in 2014, when it occupied and annexed the Ukrainian Crimean peninsula. However, such a sanction is considered to be an extreme and extremely severe step. However, since 2014, the possibility seems almost unrealistic has become much more reliable, given the more frequent mention of this issue by officials.
SWIFT, or Society for Worldwide Interbank Financial Telecommunication, is a system set up in 1973 and used by more than 200 countries. It is the world’s largest information exchange system between banks, enabling financial institutions to make payments to each other quickly and securely.
Russia uses SWIFT very actively. According to Currenttime, it ranks second behind the United States in terms of the number of transactions. Disconnecting Russian banks from SWIFT would mean that citizens and businesses would not be able to receive and send money across borders by bank transfer.
But would it be felt by Russians who do not travel abroad, do not make cross-border transfers and do not own companies such as part of the budget staff and pensioners? Yes, because many of the world’s companies that supply goods would leave the Russian market, economist Sergei Hestanov explains to the media. The variety of goods in stores would decrease and prices would rise, and the ruble exchange rate could suffer, which could cause panic.
However, payments with bank cards in Russia would still be available, as the Russian authorities are preparing for such a scenario and the country has its own national payment card system, Mir. Public sector employees have been receiving salaries on Mir system cards since July 2018, explains Currenttime.
Reuters, citing a source in the White House, said the sanctions could hit Russia’s biggest banks and affect their ability to convert rubles into dollars and other currencies. Hestanov points out that such a restriction has never been applied, so there are no examples of its consequences. Economist Maxim Blant, meanwhile, thinks it would be a blow to a Europe that depends on Russian gas.
Both economists surveyed by Currenttime do not believe that measures as drastic as the disconnection from SWIFT and the ban on converting the ruble will actually apply. According to them, the war with Ukraine will not start either.
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