Russia’s conflict with Ukraine has been deepening with every hour. The West seems to be over-relying on the sanctions against Moscow to deter President Vladimir Putin.
The West also seems to be reluctant to send troops to Ukraine to help the Ukrainian President Volodymyr Zelensky’s government. Can there be another way to put pressure on Russia?
Well, the answer is yes. It is just ‘SWIFT’. Let’s find out how.
What is SWIFT?
The Society for Worldwide Interbank Financial Telecommunication, or SWIFT, was founded in 1973.
It doesn’t actually handle any transfers of funds itself and is just a messaging system. It helps banks to communicate rapidly, securely and inexpensively.
This Belgium-based firm is non-listed and a cooperative of banks. It proclaims to remain neutral.
What does it do?
The SWIFT system is used by banks to send standardised messages about transfers of sums between themselves, buy and sell orders for assets, and transfers of sums for clients.
Over 11,000 financial institutions in over 200 countries use SWIFT. It seems to have become the backbone of the international financial transfer system.
How can it hurt?
The exclusion from SWIFT can cripple the ability of Russia to trade with most of the world. It is very important in the machinery of international finance.
(With inputs from agencies)