What is SWIFT? US and Europe will block some Russian banks from SWIFT

A coalition of NATO-aligned countries has committed to new measures meant to sever Russia from the global financial system, countries announced in a joint letter today

The letter, signed by the United States, UK, Canada, and European allies, lays out new measures to isolate Russia’s central bank, and announces a new trans-Atlantic task force to freeze the foreign assets of sanctioned individuals

In a dramatic escalation, the order also blocks select Russian banks from using SWIFT — the international payment system employed by banks to send money around the world

SWIFT, which stands for The Society for Worldwide Interbank Financial Telecommunication, is a cooperative company based in Belgium, whose owners include many of Europe’s largest banks

The organization’s eponymous payments network does not actually exchange money but is used to authenticate payment instructions between banks

Its services are used to process some 42 million exchanges in more than 200 countries each day

Exactly what effects expulsion from SWIFT will have on the political and military situation in Ukraine are difficult to predict, but the move will certainly be painful for Russian banks and markets, which have already been targeted by various financial sanctions

A comment article from the Carnegie Moscow Center think tank in 2021 described expulsion from SWIFT as a “nuclear option” that would hit Russia particularly hard, primarily because of the country’s reliance on energy exports denominated in US dollars

What is Swift? US and Europe Why some Russian banks are being removed from SWIFT Latest Updates