With sanctions imposed by the United States and other countries on Russia's financial system, as well as the risk of its exclusion from the SWIFT payments network, there may be a shift towards Bitcoin and crypto assets. 

On February 24, US President Joe Biden vowed a new round of penalties against Russian banks and financial institutions. He added that after consulting with G7 leaders, there was complete agreement on a coordinated attempt to isolate Russia from the global economy by restricting its access to key currencies. 

"We will restrict Russia's capacity to transact in dollars, euros, pounds, and yen in order to participate in the global economy." We'll make it more difficult for them to do so." 

In addition to sanctions, the country is being examined for exclusion from the SWIFT payments network. This will make it more difficult to transfer funds from abroad to Russian banks. 

Boris Johnson, the British Prime Minister, lobbied "quite hard" for Russia to be withdrawn from SWIFT, while Ukraine's Foreign Minister, Dmytro Kuleba, tweeted: 

"Anyone who now questions whether Russia should be barred from Swift must realise that the blood of innocent Ukrainian men, women, and children will be on their hands as well." SWIFT SHOULD BANN RUSSIA." 

Bitcoin is the prefered currency. 

SWIFT is a Belgian corporation that handles around 42 million messages each day for over 11,000 banks and financial institutions worldwide. It has recently been chastised for being a slow, expensive, and out-of-date method of money transfer, but it continues to be the industry standard. 

There are fears that isolating Russia from the global payment network may push it closer to China in creating its own system. 

If Russia wants to escape these onerous restrictions, the adoption of cryptocurrencies such as Bitcoin would be ripe for the taking. VanEck's Matthew Sigel, head of digital asset research, commented: 

"On the Bitcoin network, neither dictators nor human rights campaigners will face censorship." 

Bloomberg reports that Russian millionaires and oligarchs may turn to cryptocurrencies to avoid banking blockades. "If a wealthy individual is concerned that their accounts may be frozen due to sanctions, they can simply hold their wealth in Bitcoin to protect themselves from such acts," Quantum Economics CEO Mati Greenspan noted. 

Away from USD Hegemony 

Cryptocurrency can be sent from person to person without the need of banks, centralised payment networks, or third-party intermediaries. As BeInCrypto wrote on February 24, Russia has a sophisticated crypto toolkit that it can employ in such situations. 

Sahil Bloom, Vice President of Altamont Capital Management, stated that a SWIFT outage might have "longer-term second-order consequences on Bitcoin and non-fiat currencies," before adding: 

"Russia may strive to avoid the impact of the restrictions by combining its in-house system with a shift away from USD-reserve currency hegemony." 

Crypto markets have dropped 6% since the start of the week, and $200 billion has been lost since the start of the invasion of Ukraine.

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