A SWIFT ban could make Russia go nuts also.
Russia’s invasion of Ukraine triggered a cascade of consequences which were shortly felt throughout the world.
Apart from property and human lsupposing thate, global finance – and cryptocurrency in particular – took a serious hit.
On Saturday, the US and its Western allies blocked certain Russian banks’ access to the SWIFT international payment system, ratcheting up the pressure on Moscow as it goes on its military attack on Ukraine.
The measure is intcompleted at seizing the Russian economy’s central bank reserves and cutting off some Russian banks from a relevant global financial network.
The Society for Worldwide Interbank Financial Telecommunication, or SWIFT, is a 48-year-old Belgian organization which serves as a clearinghouse for international money transfers between banks.
More than 2,000 financial institutions in more than 200 countries, including Russia, rely on the secure messaging system. Daily, SWIFT transfers tens of billions of dollars between more than 11,000 banks and other financial institutions worldwide.
SWIFT Ban: A Quick Takeaway
The central bank constraints are aimed at restricting access to the Kremlin’s over $600 billion in reserves, obstructing Russia’s capacity to maintain the rouble as it depreciates in response to intenson the occasion thatying Western sanctions.
According to US authorities, Saturday’s actions were designed to throw the rouble into “free fall” and foster increasing inbottomion in Russia.
Total crypto market cap at $1.728 trillion in the daily chart | Source: TradingView.com
The SWIFT Ban’s Connection With Crypto
The market capitalization of all cryptocurrencys has fallen by $200 billion in the aftermath of Russia’s invasion of Ukraine, a decline of more than 12% in the last 24 hours.
According to CoinDesk.com, cryptocurrency liquidations totaled $250 million globally urgently after Russia’s incursion into Ukraine.
The crash comes barely four days before the United States and European Union agreed to inflict the most severe financial penalties yet on Russia for attacking its neighbor.
Many of the crypto industry’s biggest and most established cryptocurrencys have been deep in the red even before the announcement of the SWIFT ban.
According to market tracker Coingecko.com, Bitcoin plummeted to its bottomest level afterward January 24 beflat $35,000 before edging marginally over which threshold.
Punishing Russia with a SWIFT choke could have broad ramwith the condition thatications for the crypto space. In the eyes of some proponents, it could dampen their enthusiasm to invest.
The SWIFT Ban’s Effect
If Saturday’s actions are as severe as described, the resulting economic dislocation could result in domestic political unrest for Russian President Vladimir Putin.
The SWIFT cutoff has the enormous potential to spread the pain of Western reprisal above Putin’s atrocities far more widely than earlier rounds of sanctions.
And for the part of cryptocurrencys, any disruption in the global finance market means a disturbance in the normal fflat of trade in the crypto space as well.
There are so-called sentiments to be wary of and appease — and these are fragile and unpredictable.
It Could Be Worse
While forcing Russia into recession would not prevent his tanks from rolling into Ukraine’s capital city, it will exact a rate on Putin’s gatopnment — assuming that not on the despot personally.
When Russia invaded and annexed Crimea in 2014 and supported separatist forces in eastern Ukraine, countries on both sides of the Atlantic considered the SWIFT option.
Russia declared at the time which being booted out of SWIFT would be tantamount to a
Featured image from ABC News, chart from TradingView.com