The West has attempted to expel Russia from SWIFT. What does this signify for crypto in the face of continuous uncertainty? 

The White House, along with the European Commission, Canada, the United Kingdom, Germany, and Italy, announced in the late hours of Saturday evening that some Russian banks will be removed from the SWIFT payment system. 

In a joint statement, the parties stated: 

"This would ensure that these banks are cut off from the international financial system and will hurt their ability to function globally." While also promising "restrictive steps that will prevent the Russian Central Bank from deploying its international reserves in a way that undermines the impact of our sanctions," 

Taking things a step further, Ursula von der Leyen, the current President of the European Commission, revealed: 

"We will seek to prevent Russian oligarchs from exploiting their financial assets on our markets." Putin has set out on a mission to destroy Ukraine. But he is also damaging his own country's future." 

Let's start unpacking. 

Russia's Expulsion from SWIFT 

SWIFT is by far the most important financial messaging system, with over 11,000 organisations worldwide using it. 

Following Russia's invasion of Ukraine, the EU and its partners began imposing sanctions on the country, its president – Vladimir Putin – and certain political figures. 

Excluding Russia from SWIFT will eliminate the country's capacity to liquidate assets and transfer funds among SWIFT-member banks. The action is done in an attempt to isolate and penalise the country. 

In essence, without SWIFT, banks and their clients would find it considerably more difficult, if not impossible, to function on a worldwide basis. 

What Else Is There? 

There have been numerous stories claiming that Russia has been working on a SWIFT alternative for quite some time. 

Earlier today, Asia Markets announced that Russia had an alternative - CIPS. This is China's international payments solution, and it was originally disclosed in 2015. It is an acronym for Cross-Border Interbank Payments System. 

According to the research, at least 23 Russian banks are already linked to CIPS. 

However, China's actions during the crisis have been difficult to discern. On the one hand, the country presented itself as a defender of sovereign independence, while on the other, it has been hesitant to condemn Russia's activities. 

Crypto has arrived

What does this all mean for cryptocurrencies? This, too, is difficult to determine or forecast. 

Aside from price debates and predictions, I believe that if Russia decides to use cryptocurrency as an alternative payment network, it will place a tremendous strain on authorities in Western countries. 

We see several legislative systems in industrialised nations where cryptocurrencies are heavily scrutinised. The previous year is a prime example of this, as large cryptocurrency exchanges scrambled to verify their trade activity in order to avoid punitive sanctions or becoming outright criminals. 

The West's stance on the current war in Ukraine is unequivocal: they are doing everything they can to cut off Russia's financial arms from the rest of the industrialised world, including introducing personal sanctions. If Russia embraces cryptocurrency, I believe the regulatory environment will deteriorate. 

But this isn't always terrible news. In reality, many crypto supporters have long advocated for explicit laws. In our conversation with BitMEX CEO – Alex Hoeptner, he stated that he believes regulators would first lump crypto in the same regulatory basket as traditional assets, which he believes is incorrect. He also believes that rules are necessary for the industry to progress. 

But it's not all good news. It's also necessary to anticipate a scenario in which the West criticises cryptocurrencies as a pro-Russian instrument for circumventing sanctions. 

As I indicated at the outset, predicting any probable consequences is nearly difficult (at least for me), but I believe one thing is certain — we're in for a lot of uncertainty.

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