Russian invasion of Ukraine

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Stonehedge

Just quoting Boris this, just because I think it captures what a Swift ban might mean for Russia. It is not a killer blow, more a very big inconvenience that they have had time to plan to partially mitigate. It could also be framed as a sanction that would have a similarly tough impact on the EU and US as Russia itself.

Why would a Swift ban be so serious?
Boris Johnson told MPs it would harm the Russian economy if it were locked out of Swift. Run-of-the-mill transactions would need to be conducted directly between banks, or routed through fledgling rival systems, adding to costs and creating delays.

Why is the US reluctant to implement a ban?
One reason is that the impact on Russian businesses might not be so serious. The head of a large Russian bank, VTB, said recently he could use other channels for payments, such as phones, messaging apps or email. Russian banks could also route payments via countries that have not imposed sanctions, such as China, which has set up its own payments system to rival Swift. A ban on Russia using Swift could accelerate a the use of China’s rival Cips system. There is also a fear that it could damage to the US dollar’s status as the global reserve currency, and accelerate the use of alternatives such as cryptocurrencies.

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greentricky in reply to @Stonehedge

That's basically the balance they are struggling to strike, how do you impose painful sanctions without accelerating Chinese dominance. And as you've said, most of these sanctions were threatened after Crimea, so Putin has known exactly what you plan for, hence building up massive foreign currency reserves, signing up to Cips, starting work on new export markets. Just on his foreign currency reserves they think he can fund his existing budget for the next four years as they have such a small debt to service now.

Dons tinfoil hat, seeing how it went for Libya and Iraq when they suggested no longer selling oil in USD, I can't see US keen at the prospect of Russia selling it in Yuan and why wouldn't Putin want to, he is going to need it to service any debt he now takens on which will no doubt come from Chinese markets at exorbitant rates

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