#426
SWIFT Resolution

Published:

Feb 26, 2022


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Published:

Feb 26, 2022


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As the shockwaves of the Russian invasion of Ukraine have reverberated throughout the world, companies involved in the international flows of funds have reacted swiftly…aside from SWIFT itself.

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is a core component of the communications infrastructure powering connectivity among financial institutions in more than 200 countries, and is often considered one of the most extreme levers when invoking sanctions. Case in point: in 2012 Iran became only the second country behind North Korea to be cut off.

Despite the potential to generate a more powerful blow to Russia than targeted sanctions, the repercussions of cutting off SWIFT would be far-reaching, threatening to harm Western countries and companies with high exposure to Russian industries. Perhaps the most concerning ramification, however, could be an erosion of the dollar-dominated global financial system.

While the G7 weighs the pros and cons of their next move, other cross border focused fintech companies have taken an overwhelmingly cautious approach towards not only Russia, but also Ukraine. Fintech money transfer business, Wise (FKA TransferWise), capped transfers to both countries at $224, while Brex halted all cash and card transactions to or from Ukraine. These moves come on the back of an order by the National Bank of Ukraine to suspend e-money issuance, distribution, and replenishment.

With dwindling options for individuals, businesses, and (potentially) governments to move money internationally, crypto has taken center stage.

This is first and foremost a humanitarian crisis, but this dilemma also highlights the importance of access to the world’s financial rails. Here’s hoping for a swift resolution all around.

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