Hours into the Russian invasion of Ukraine, the foreign ministers of Estonia, Latvia, and Lithuania encouraged “disengaging Russia from SWIFT,” the international payments system. Polish and UK officials echoed these calls as well.

Why should we care?
These proposed sanctions, if enacted, would deliver a significant short-term blow to the Russian financial system and effectively hinder international financial flows through Russia, and make it hard for the country to trade with others. SWIFT, which is a Belgian cooperative, facilitates trillions of dollars’ worth of transactions; cutting Russia off from the network would not make Russian international payments impossible, but it would make them slower and costlier, including for payments Russia receives for gas and oil. Russia sponsors the CIPS network as an alternative to SWIFT; approximately half of global cross-border payments use the latter network. Russia made up 1.5% of transactions within SWIFT in 2020. Germany seems reluctant to impose such severe sanctions on Russia, citing the move’s potential to hurt Russians uninvolved in the conflict. But growing calls may make the international payments network part of upcoming sanctions in response to Russian aggression. Regardless of the fine print, Western states have clearly eyed financial technologies as a potential tool for preventing the further outbreak of war.