Boris Johnson said on Tuesday that he is talking to the U.S. about a possible Russian ban from the SWIFT system, which undergirds global payments. Amid increasing threats of a Ukraine invasion, Western governments are looking for deterrence measures.
The British leader's threat could carry significant economic consequences: The SWIFT global payments system carries more than five billion financial messages each year covering payments, trade finance, foreign exchange and treasury, and securities. If Russia is banned from the system, that could mean cutting off access to banking and credit card systems from across the world.
This specific economic sanction has only been used on two countries so far, North Korea and Iran. Iran launched an alternative called SEPAM in 2013 as a result. VTB Bank head Andrey Kostin said last month that the sanction “would be a very serious measure, 'unfriendly' doesn't do it justice." However, the Biden administration has made it abundantly clear that if Russia proceeds with military force in Ukraine, the U.S. is prepared to enact economic sanctions.
In an effort to try to get ahead of sanctions, Russia experimented with blockchain-based solutions as an alternative in April last year. It has also developed its own banking messaging system known as SPFS. But the Russian government's apparent disagreement on how crypto should be regulated could hobble its attempt to use digital currencies as a workaround.