Why disconnecting Russia from SWIFT is not as bad as it is commonly believed


Frank military preparations near the border of Ukraine, the landing of opposition leader Alexei Navalny and the defeat of his headquarters, which were judicially recognized as extremist organizations, and the "explosion from the past", in which the Czech special services blamed our famous "GRU agents Petrov and Boshirov" once again propose to disconnect Russia from the SWIFT system, as well as introduce a number of other sanctions. This is not the first time this threat has been voiced, but this time a corresponding resolution has already been adopted by an overwhelming majority of the MEPs. How realistic is its implementation, and is there life after SWIFT?


SWIFT is an international interbank system for transferring information and making payments. Its members are over 11 thousand organizations around the world, more than 30 million transactions are carried out daily. Despite the fact that this is a private cooperative registered in Belgium, after September 11, 2001, the US Treasury Department, the CIA and the FBI received full access to all data on transactions carried out. There is also a precedent for disconnecting the Islamic Republic of Iran from SWIFT under pressure from Washington, so this "horror story" has been actively scaring the Kremlin since 2014, but it has not been introduced. Why is that?

Let's just say that the SWIFT issue is a fertile topic for HYIP from both the Western and Russian sides. The resolutions of the European Parliament are not binding on the European Commission, but the deputies were able to publicize loudly and express their anti-Russian position. The final decisions will be made by completely different people and for different reasons, which we will discuss in detail later. Moscow, too, did not remain in debt. Senator Vladimir Dzhabarov, deputy head of the Federation Council committee on international affairs, said:

Very good, let them turn it off, we have a backup for this system, as the head of Russia has already stated.

The SWIFT backup is its domestic counterpart, the Financial Messaging System (SPFS), the creation of which the Russian leadership was concerned about even after the first threats from the West expressed in 2014. Today, both our banks and a number of foreign banks are connected to it, mainly from the CIS countries, but there are also Turkish, Japanese, Chinese and French banks among them. Thus, there will be no collapse of the financial system inside Russia and in the post-Soviet space. Another thing is that problems may arise for large companies selling raw materials for export for foreign currency. But we will come back to this question later.

The well-known Russian oligarch Oleg Deripaska proposed introducing a "digital ruble" for settlements in case the country is disconnected from SWIFT. However, this idea has caused some skepticism in the expert community. “Digit” is only a form of transferring financial information, but foreign counterparties must be ready to accept and convert such a ruble to participate in international settlements. There is an even more exotic idea of ​​switching to cryptocurrencies in settlements. Here you can recall Venezuela's attempt to introduce its own "el-petro", providing cryptocurrency with oil, but the topic has not yet gone due to lack of demand. Now, sanctioned Iran is trying to do something similar using Peyman cryptocurrency backed by gold to pay for imports. But we should not forget that just a few days ago, the founder of the Thodex cryptocurrency exchange, Turkish businessman Faruk Fatih Ozer, disappeared, taking with him 2 billion dollars belonging to investors.

If we recall another Iranian experience, then since 2015, for five years, Tehran has made a natural exchange with Moscow. Russia took oil and gas, and in return provided the Islamic Republic with equipment and grain.
Finally, it will be possible to more actively use the Chinese analogue of SWIFT called CIPS (China International Payments System). This system, like the SPFS, is so far mainly designed for the domestic market of the PRC, but a number of Russian banks are already connected to it, which will simplify settlements between Moscow and Beijing. In general, there are options, from quite realistic to frankly "hype".

The question is completely different. Please note that MEPs are scaring Russia by disconnecting from SWIFT, but not a word is said about the ban on participation in international settlements, and these are completely different things. SWIFT is not about transferring money from one account to another, but rather a system for transmitting financial messages that all its participants must trust. If our country is disconnected from the ability to carry out them in an automatic mode, no one will prevent the counterparty banks from communicating with each other in a different mode, but at least by phone or fax. Naturally, this will complicate everything, slow it down and lead to an increase in costs, therefore it is not at all interesting for Western bankers themselves.

The key question is what role Russia plays today in the world the economy... Yes, we have a very one-sided and vulnerable raw material export model, but our oil, gas, aluminum, titanium, nickel and palladium are still needed by both Europeans and Americans, and the EU and the US must pay for them in foreign currency. If Washington had wished to deliver a really powerful blow to Moscow, it would have banned dollar payments by imposing sanctions on banks wishing to have dollar settlement accounts with Russian financial institutions. That would be a blow so a blow. Exporters of oil and gas will then not be able to receive foreign exchange earnings, the foreign exchange market will not be able to settle in dollars, the Central Bank will not be able to carry out foreign exchange interventions.

Needless to say, such sanctions will be double-edged? For this reason, Western policy they prefer to do with half-measures, imitating an uncompromising struggle with Russia in a safe format for themselves. One should start to be afraid only when the EU and the US are really, and not in words, ready to refuse to use Russian resources.
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  1. Bakht Offline Bakht
    Bakht (Bakhtiyar) 1 May 2021 13: 00
    +1
    but our oil, gas, aluminum, titanium, nickel and palladium still needed by both Europeans and Americans, and the EU and the US must pay for them in foreign currency.

    Exporters of oil and gas will then not be able to receive foreign exchange earnings

    In the absence of payment, the goods, as I understand it, are not shipped. Russia will not receive foreign exchange earnings, that is, cut paper. And the Europeans won't get real goods.
    I am tired of repeating that in a test mode for six months or a year it is necessary to fulfill the dreams of MEPs. At their own passionate request. And look at the result. Russia can last six months on its reserves. Plus China will not refuse to trade. And what will the western factories do?
    1. Morgan Offline Morgan
      Morgan (Miron) 1 May 2021 15: 01
      -5
      I don’t know about Europeans, but you will eat "oil, gas, aluminum, titanium, nickel and palladium" and receive a salary from minerals.
      1. Bakht Offline Bakht
        Bakht (Bakhtiyar) 1 May 2021 16: 17
        +2
        I don't know, but food security has been achieved in Russia. So there will be something to eat. Unlike Europeans. Everything else is made in China. So the reorientation to the East is a death sentence for Europe. I have been talking about this since 2014.
        The shutdown of factories or a decrease in production means unemployment, the burden on the social sphere and further increasing. So the salary will not be there at all, and freshly printed dollars and euros will be eaten.
        By the way, I'm from Azerbaijan.
      2. Old Skeptic Offline Old Skeptic
        Old Skeptic (Old Skeptic) 1 May 2021 17: 44
        +2
        and you will eat "oil, gas, aluminum, titanium, nickel and palladium" and receive a salary from minerals.

        We receive our wages in rubles. Inflation in Russia is not so much dependent on the exchange rate.
        In terms of food, Russia is practically a self-sufficient country, and if the price of fuel and lubricants on the domestic market falls, then food may become cheaper.

        But the Russian volume of those same: titanium, oil, gas, food, etc. etc., it is not easy to replace OO, therefore there will be "difsyt", the price of "Western" products will go up, and competitiveness, respectively, down (with all the consequences that follow from this).

        At the same time, Russia will be able to obtain imported goods from alternative sources, for example, from Asia. They also need titanium, oil, gas, food, etc. etc.,

        So that all sorts of Morgan with Rdschilds can be lost.
  2. Jacques sekavar Offline Jacques sekavar
    Jacques sekavar (Jacques Sekavar) 1 May 2021 14: 11
    +3
    is there life after SWIFT?

    Disconnecting from SWIFT is a serious step that will complicate the life of the banking system of the Russian Federation but also hit the EU, the second largest partner in trade with the Russian Federation after China.
    Alternatively - Belarus (union state), CIS, SCO, BRICS, EAEU.
    RF has its own alternative to SWIT - SPFS, and the Central Bank is connected to CIPS.
    In addition, the Russian Federation is a major shareholder of the AIIB, which no one will ever disconnect from any international financial settlement system.
    In general, there are options.
    Much worse is the possible freezing of international reserves, a ban on the purchase of Russian government debt, a freeze of foreign exchange reserves, blocking of foreign currency accounts of public and private organizations in Euro and Dollars, a ban on the supply of high-tech goods, rejection of energy resources and reorientation to other suppliers. The RF is a part of the whole world, and a part, even a very large one, cannot be larger than the whole. Therefore, they can refuse from the resources of the Russian Federation, but it will be expensive, and therefore the probability of such a development of events tends to zero.
  3. Sergey Latyshev Offline Sergey Latyshev
    Sergey Latyshev (Serge) 2 May 2021 16: 44
    0
    another scarecrow about SWIFT. Every 2-3 days they scare for about a year or so.

    So what? A cooperative in Belgium will impose sanctions. Everything will rise in price.
    So with SWIFT, everything rises in price, despite the instructions ...

    And our main cooperatives - cooperatives Lake and cooperative Forbes will hardly affect it. There are not transfers, but stocks ...
    On the contrary, for sure, like Korona, it will add greenery to the first hundred cooperators ...
  4. Dear sofa expert. 2 May 2021 21: 56
    +4
    There will be no disconnection of Russia from the SWIFT payment system, and in any case, at the initiative of the Americans, there will be no, and there cannot be, a priori!
    For those who understand the essence, this is obvious.
    The fact is that SWIFT is a system that is completely controlled by the Americans.
    You have to be out of your mind to give up such control. Moreover, when it comes to such a huge transfer of money between Russia and Europe.
    Iran is a bad argument, since Iran, with all its will, cannot provide either the volume or the real "threat" that Russia, which is trading with Europe, can pose to the Americans.
    In turn, the loss by the Americans of control over the transfer of money between Russia and Europe, deprives the United States of the opportunity to impose further deterrent sanctions against the Russian state.
    Europe, in turn, will easily manage, for trade with Russia, its own SEPA payment system, created by the Europeans specifically - as opposed to SWIFT, which is dependent on the Americans, for its own exit from the control of the Americans, as well as for such force majeure cases, as today.
  5. Machine_Learning (Aleksandr Ioannov) 10 May 2021 08: 23
    +1
    Switching off from SWIFT is very bad for the Russian Federation in the current situation.
    The result is:
    1. Lack of cash.
    2. Printing of paper money in large volume.
    3. What will entail an increase in inflation in the Russian Federation.
    4. People will start taking cash from banks.
    5. This will lead to the ruin of many banks.
    6. Private exporters will barter to sell their goods abroad and sell these goods in Russia trying to "cash out". This will cause an increase in costs - from here many export enterprises (private) will begin to close.
    7. All this will cause a powerful outflow of the population to the CIS countries - Kazakhstan, Ukraine, Belarus, etc.
    8. Card methods will be introduced in grocery stores for the poor.

    Pros:
    1. The export of money from Russia will decrease significantly.
    2. People will start moving in rural areas.
    3. Much will be allowed in rural areas - excess taxes and prohibitions will be removed.
    4. The Russians will begin to rebuild many factories, factories - to replace imports.
    5. The slogan "the earth feeds" will come out on top.
    6. People will start to be careful about money.
    7. Russian banks will start issuing local plastic cards (Sberbank, VTB, RB)
    8. Gradually we will get used to such a life.
    :))